Question for the Money Doctors
Question submitted on Sep 30, 2015.
QuestionI am recently divorced and starting over. My credit is not good at all because of financial problems during my marriage. I don't make much and the only thing I was left with in the divorce was a car that I can't afford the payments on. I've tried to refinance it but because of my credit it's impossible. I only have a few years left to pay on the car and feel like if I let it go I am loosing a lot of money put into it. I need the car for work and to get my son to school. Are there any other options to keeping my car and possibly lowering my payment so its affordable?
Yes – there are other options. You could try contacting the current lender and explain your situation. Many financial institutions are willing to compromise in order to keep you as a customer. They might offer lower monthly payments or even temporary deferment if you have a solid payment history.
You could also try borrowing the balance from a friend or family member. Close out the loan, then pay back your friend/family at a lower (or possibly) zero interest rate and no late fees.
The better option would be to sell the car, pay off the loan, and find something more affordable. Your loan payments and the associated vehicle costs are obviously beyond your financial means. Is there public transportation available? Can you carpool to work and have your son ride the school bus? Any time you can go without a car payment means money in your pocket.
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