You will need to do the math on how much you can save in terms of monthly payments by downsizing your car. Because of the damage to your credit score of any repossession, it may be more difficult to finance another vehicle purchase except at a very high interest rate. A car loan rollover means you’re paying interest on the old car debt as well as making the payments on your new car.Ī better option may be to hand back this car and purchase another, lower cost, vehicle. People compound this problem by trading their cars in while the loan value is higher than the car’s value, meaning your still paying for the old car with your new car payment. It can take four or even five years to get the balance of the loan below the value of the vehicle. In six and seven-year car loans the problem is worse. In a five-year car loan for the first 3 years of the loan you usually owe more than the car is worth. Long term loans mean you don’t pay off the principle very quickly and you can easily end up owing more than the car is worth. You may be able to extend the term of the loan or arrange for a lower interest rate, however this often leads to a further concern. The first option is to see if you can refinance or negotiate a new payment plan. If you purchased or leased a vehicle that is too expensive or the interest rate is too high and you are no longer able to make your payments, you need to consider your options. When should you walk away from an auto loan or lease?Ĭar loan payments shouldn’t cause you further financial problems. If you feel you have purchased or leased a vehicle that is more expensive than you can afford, it is critical that you talk with a Licensed Insolvency Trustee about your intentions prior to signing your paperwork. If you do, you will remain liable to pay any balance owing. You cannot decide to return the vehicle weeks or months after you file. It is important to understand that for your car loan debt to be discharged in an insolvency you must surrender the vehicle either before or as part of the filing. Since an insolvency eliminates unsecured debt, this debt will be eliminated like any other. If you are filing a consumer proposal or bankruptcy to deal with your other debts like credit card debt, payday loans or tax debts, you can include the shortfall or deficiency on the loan balance in your filing. They may also send the account to a collection agency. The lender can sue you to collect, obtain a judgement in Court and pursue legal options like a wage garnishment. The deficiency becomes an unsecured debt that you are responsible to pay. Your lender will also add in various fees, penalties and repossession costs. This number represents the difference between how much loan was remaining on the vehicle and how much the car was sold for. Included in this statement will be a calculation of how much you still owe (called the deficiency or shortfall). Your lender may ask you to drop the vehicle off at an agreed time and place, or they may send someone to repossess the vehicle from you.Īfter repossession, the lender will sell the vehicle and send you a statement of realization. To make a voluntary repossession, you notify your lender you will no longer make payments and wish to return the car. You can voluntarily surrender the vehicle to your lender or dealership on your own. What people don’t know is that you don’t have to wait for the creditor to repo the vehicle. If you have a secured car loan or lease, the lender (or finance company) has the right to repossess your vehicle if you fall behind on your payments. When should you walk away from an auto loan or lease?.Our secure online application form is easy to complete, all you need are a few personal and employment details. We can work out your monthly payments and get you driving away in your new vehicle TODAY!Īpplying for a vehicle loan online is one of the quickest and easiest application methods. You can come on down and choose from hundreds of used cars and trucks on the spot or you can find your own vehicle and we can arrange the loan for you. Whether you have Perfect Credit, Good Credit, Bad Credit, Slow, Bankruptcy, Divorce, Collections we can help. With our experienced in house finance specialists we can help anyone obtain the loan needed for that new or used car, SUV, truck, atv or bike. It was established to help people get the financing they need along with the vehicle they want. The Loan Arranger was established over 30 years ago and now has five locations Scarborough, Cambridge, Barrie, Oshawa and Six Nations.
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