Thinking of selling your car? But have an outstanding loan you need to settle first? Here are 5 ways how you can settle your outstanding loan before selling your car!
1. Contact Your Creditor or Loan Agency
First, contact those you owe money to. Communication is very important and letting them know that you are in financial hardship could work to your benefit. They may allow you to make smaller payments or come to some kind of agreement on your behalf.
Waiting until your account is completely charged-off or closed because of insufficient or no payments can make it harder to reach a settlement that works for you.
2. Loan Reassessed by Another Institution
Some banks or other financial institutions are willing to reassess your existing car financing. It’s possible that you may be paying too high of interest with your current financing institution, at least in the eyes of the newer institution.
If that is the case, the institution can offer a refinance plan at a cheaper rate than what you are paying. Should you choose to accept, they will pay your existing finance off and secure newly-agreed terms with you. You could also benefit from promotional lower interest rates.
3. Keep Your Promises
If you come to some kind of settlement with the original loaner or a third-party creditor, don’t agree to settlement payments or decisions unless you can keep your promise to honour them.
Defaulting on a settlement will put you in a worse position than you previously were with just an outstanding loan. You may also face the possibility of having your car repossessed quicker than if you tried partly paying the outstanding payments.
4. Consider Using Your Credit Card
Depending on your credit card institution, you can transfer some of your car loan to your credit card. This can be helpful if the outstanding amount of your car loan does not surpass your credit limit or what the amount the creditor is allowing you to transfer.
Keep in mind that this will affect your monthly billing for your credit card and may collect interest. On top of that, your next loan payment will still be due next month.
Make sure you can meet at least both the loan and credit card minimum monthly payment before doing this.
5. Talk to A Professional Debt Counselor
Finally, don’t be afraid to seek advice from a professional debt counsellor. They may be able to guide you in coming up with a plan to pay your outstanding loan before selling your car or possibly having it repossessed. The counsellor will also have other information or contacts you can use to benefit your situation.
It doesn’t hurt to ask if they could help.
If you need help with your outstanding loan or would like to seek professional advice, don’t hesitate to give Genie Financial Services a call! Genie’s team of experts have over 50+ years of experience and have facilitated over 20,000 transactions worth more than $200 million. Genie’s services guarantee you an easy and hassle-free experience that makes car financing quick and simple.