Help with getting out of an upside down car loan.
Find how to get out of an upside down car loan. There are a few programs that will help people who are facing this hardship, with a focus on those applicants that need transportation for work. If the amount owed on an auto loan is more than what the car is worth, then the borrower is considered to be upside down or “underwater” on it. Learn how a borrower, including people with a low-income those with bad credit, will get assistance with paying off the balance on an upside down auto loan to get out of the hardship.
The fact is that more hard-working families need help with getting out of car loan that has negative equity on it. Many people are in this situation because they made poor financial decisions, such as purchasing an automobile that they could not afford, not providing an adequate down-payment or taking out a very long term car loan such as 6 or more years. However there are a number of other individuals that need assistance as their financial situation unexpectedly changed since they made the purchase. Maybe the borrower had a serious medical issue, had a spouse die, or some other exceptional circumstance.
Any type of assistance is targeted at the later group of individuals; those with a crisis that they did not create. So when the financial crisis was out of the families control, these are the type of scenarios in which a borrower that is underwater can get help. However note that the assistance programs are very limited and the applicant needs to often make difficult decisions and they also generally need the car for work reasons.
Resources to help borrowers with upside down car loans
It is recommended that an individual start the process by contacting a non-profit credit counseling agency for help with an upside down car loan. If the applicant's income is low enough, these companies may be able to provide free help to the borrower on not only a car loan that is upside down, but they can also provide advice on any other other consumer debts they may have. There are hundreds of these organizations located in all corners of the United States. Some focus these services on one or more cities and others are national.
A credit counselor can give tips on how to get out of the upside down car loan. However the solution is not always easy, and unfortunately most applicants may not even be able to be assisted as their financial situation is so dire. Some possible options may include consolidate all debts to free up income, taking on another part time or side job, selling the car at a loss and then buying a much more affordable auto, and more. Each situation is reviewed on a case by case basis. Locate other ways to get debt help from non-profit credit counseling agencies.
If the borrower will end up losing their car or truck due to this issue, and then lose their job as a result of not having transportation, there may be help available from charities or government funded programs. If there is any assistance provided (which is not common) these groups will generally only help borrowers with an upside down car loan if their situation negatively impacts their ability to make a living.
There are several different programs to try. They include Ways to Work auto loans, which provides low cost financing to a small number of applicants. It is focused on paying for transportation for people that need a car for work or job training. Another option is a community action agency, which may also have suggestions for employment needs.
Rollover the existing car loan into a new one. This is an option for people with negative equity / that are upside down. This will help a borrower who is currently shopping for a new vehicle. There are pros and cons to doing this, but a roll over is something to explore. Learn more about car loan rollover.
Borrowers with upside down car loans may also be able to get assistance from churches, charities, and non-profits. There are a small number of these agencies which may be able to help by offering some form of alternative transportation. There may be some costs due from the applicant, but any funds will often have competitive interest rates for the automobile loan. Find more details on these free automobile programs.
When all other options fail, and if a credit counselor can't provide the help that is needed, then borrowers that are underwater on their auto loan can try some other low to mid cost lenders for assistance with an underwater loan. There are a number of options including peer to peer lenders, credit union products, salary advances, payday lending companies, and many others. Each of these comes with pros and cons, and generally if an individual is upside down on their car loan they have other financial challenges so these resources are usually not good alternatives. But they can be considered.
These financing products for ending an upside down auto loan are an effective option. They may be able to assist in a limited number of instances. Some are focused on borrowers with poor credit scores and others are more mainstream. There may be as many as 10 different products to explore, and each is targeted at different types of consumers. Find a listing of low interest rate loans that may be able to help with transportation needs. Some may be able to be used to pay the difference on what a car is worth and what the family owes the lender.
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