How do I get out of my high interest rate auto loan if I have bad credit?
Generally speaking, when you obtain financing for the purchase of a vehicle, you are obligated to repay the loan according to the terms and conditions described in the contract. If you are unable to obtain a loan to refinance the vehicle you are not left with many options.
One option is for you to sell the vehicle. Depending on how the vehicle is titled, you will probably be required to inform the finance company of your plans, and upon the sale you will need to repay the loan immediately. Details for accomplishing the sale of a vehicle encumbered by a loan vary by state. Your state department of motor vehicles Web site may have information on this subject.
Another option is to voluntarily surrender the vehicle to the lender. However, this does not release you from the terms of the loan. The lender will sell the vehicle at an auction. This normally leaves the debtor with a deficiency balance. For example, let us say you have a loan on the vehicle for $10,000 and the vehicle is sold at auction for $6,000. The $6,000 proceeds from the sale will be applied to your balance. Instead of owing $10,000 you will be left with a deficiency balance of $4,000. Keep in mind these are figures I made up and it is reasonable to assume the creditor will add fees and interest expense to your balance. To learn more about voluntary repossession I encourage you to read all about voluntary repossession.
If you are thinking about voluntary repossession and struggling with debt burdens, I suggest you get a no-cost debt relief quote from one of Bills.com's pre-screened providers.
I hope this information helps you Find, Save, and Learn.