Said It Here

How to get out of a high interest car loan

High monthly payments, high interest rates, and expensive insurance can make an expensive car loan drain your savings and eat up your paycheck. Being underwater on the loan or facing joblessness makes it difficult to know whether to refinance, sell, or surrender the vehicle without losing transportation completely.

What people tried

Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.

  1. 1
    Surrendering the car to the bank
  2. 2
    Selling the car through platforms like Carvana or Carmax
  3. 3
    Refinancing the remaining loan for a lower payment
  4. 4
    Cutting other budget expenses or picking up a second job to pay it off faster
  5. 5
    Getting any available job or multiple jobs immediately to generate income
  6. 6
    Putting extra payments toward the principal to get out from being underwater
  7. 7
    Cutting monthly expenses such as phone plans and insurance to free up cash
  8. 8
    Doing delivery or gig work like DoorDash and Amazon Flex for side income
  9. 9
    Driving the current car into the ground and saving up cash for the next vehicle
  10. 10
    Refinancing the auto loan directly
  11. 11
    Checking local credit union used car rates
  12. 12
    Shopping around with multiple lenders

In their words

Unedited, most upvoted first, each linked to the thread it came from.

“I regret the financial mistake and will never finance another car after this . . Should I surrender the car? I don’t have much emergency savings to buy another car if I sell it . Any advice would be helpful . It’s eating up my paycheck not including the $290 insurance it comes with/premium gas”source ↗

Purple-Piano6976 · r/personalfinance · 910 upvotes

“I bought a vehicle at the height of interest rates. I’ve paid almost all of my other debt off since.”source ↗

“i am pre approved for a personal loan with a rate about 3.5% lower than the car note.”source ↗

“is this a good idea? or even allowable with a personal loan?”source ↗

Impressive-Peak-6596 · r/personalfinance · 28 upvotes

“Stuck with a $459/mo, 22.59% APR car loan ($10k left) & currently job hunting. Need advice on how to navigate this.”source ↗

“The car interest is crushing me, and the vehicle is underwater by about $4,700. I am trying to prioritize getting a job, but I feel completely stuck on what to do with this vehicle note.”source ↗

“Is refinancing even an option with a 650 credit score and $4.7k negative equity, or do I need to secure employment first?”source ↗

“What are my best options to mitigate this car debt so it doesn't drain my savings while I finish my degree?”source ↗

“I feel stuck. I really want financial stability to some extent, but I just don’t know where to start period.”source ↗

Street-Tooth1010 · r/personalfinance · 27 upvotes

Where this came up

r/personalfinanceauto loansbudgetingcar loandebtinterest ratespersonal financeunemployment

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