I’ve read a lot of Q&A on this topic here but still can’t find anything to help. I need to refinance my car or I’m going to end up losing it. I’ve tried local banks and unions and they all said no. My credit is horrible, I owe about 12,000. My husband lost his job a few months ago and recently took another job with a huge pay cut difference. We just can’t afford the payments anymore, we have kids and can not afford to lose the car but can’t afford to keep it either. I need help finding a place that would refinance my loan so we can get a lower payment even with bad bad bad credit.
Sadly, with lenders being extremely picky, you have very little hope. Every time you get and inquiry to try to re-fi, your FICO goes down. Do this many times in a short period, and it plummets. The only thing I can advise is to avoid the repo man. Keep the car parked away from the garaged address, drop the insurance to the absolute bear min. to save some case (if applicable). Also, make sure that when errands are run, someone stays in the car WITH it running…preferably an adult for sure.
I am sorry for you, and you will prevail!
First check the book value of your car on kelly blue book (kbb.com) to see what the value of the car is – it may be that you owe more on the loan than the bank thinks the car is worth. That’s probably why the banks are saying no. Either that, or the income isn’t enough to cover the payments.
Have you considered getting a job yourself – maybe nights when your husband could take care of the kids – to fill in the gap in your budget? Or if you are a stay at home mom, taking care of other kids for money?
Otherwise, you might be able to trade the car in for something much older, and cheaper, and have the dealership finance the loan, but those interest rates are usually very high.
Do you have a family member who might be able to get a loan in their name, and let you use those funds, to pay off your car, and then you pay them back at a lower amount? Credit unions in my area allow people to refinance cars, so if you have a family member with a paid up car, they might be willing to let you use that car to get a loan, use those funds to pay off your car, and then you pay the loan that is now on their car.
Another option I can think of, if you have credit card debt, is to transfer your credit card debt to a lower interest rate card, and use the savings from that to free up some cash. I like the Pentagon Federal credit union – they offer a visa card with 2.99% balance transfer rate for the life of the balance transfer.
Otherwise, google search the term "frugal living" for ideas where you can reduce expenses and cut your budget in other ways to free up cash.
Your best option is to speak with an attorney and see what your options are. Usually the first visit is free. Also, if you own your home and have equity in it, perhaps you can get a 2nd mortgage for 5 or 10 years that would reduce your monthly payments and help rebuild your credit. If I can be of any further help, please let me know.