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Can you get out of a bad car loan?

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2014-09-12 16:02:22
2014-09-12 16:02:22

Car buyers often get suckered into high interest or extended-term loans which far exceed the value of the vehicle. This is especially true for buyers with bad credit.

While debt relief and credit counseling agencies will tell you they can help, many of these companies are scams and will do more damage to your credit than good.

The truth is you can't just walk away from a loan. As soon as you stop making loan payments your lender will send the loan to a collection agency. Collection agencies will harass you and family members for payment. They can also legally garnish your wages to cover your unpaid debts. The fact that your account is in collections will also be reported to the credit agencies, and this will have a serious negative impact on your credit rating and credit worthiness.

If you cannot afford your loan payments, first call the lender. Many financial institutions have hardship programs available for people who cannot afford the monthly payments. How these programs work vary by lender.

Additionally, review all offers that loan agencies offer you before getting it. Sometimes, they do offer their clients promotions but in reality, and in the long run - this could cause you a headache and have a bad loan.

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A car loan is considered a personal loan. While bad credit makes it harder to get any loan, individual car dealers decide whether they will allow a car loan with bad credit. A personal loan is an unsecured loan.

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It is still important to have a car loan even with bad credit if you wish to purchase a car. By going through your bank you can find the best way to take out this type of loan.

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First you should seek out your local bad credit car loan providers, and ask them to provide you the re-financing car loan. In this situation the normal lenders will most likely turn your down.


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