If you can borrow an unsecured personal loan to pay off your car, you’ll no longer have to use your car as collateral. However, personal loans tend to carry higher APRs than auto loans, which could make your debt more expensive overall.
Can you get a loan to pay off finance?
There is also the option of taking out a personal loan to pay off your car finance. You could use the loan to pay your settlement figure, which would then make you the legal owner of the car.
What’s the fastest way to pay a car off?
Once you have an idea of how much you could save, you can take advantage of a few methods to pay off your car loan faster.
- Refinance with a new lender.
- Make biweekly payments.
- Round your payments to the nearest hundred.
- Opt out of unnecessary add-ons.
- Make a large additional payment.
- Pay each month.
Can I use a debt consolidation loan to pay off my car?
A debt consolidation loan could help you pay off your car loan and avoid a car repossession. Just remember that consolidating this kind of debt to a higher interest rate (even with lower monthly payments) will likely mean you’ll pay more in interest over time.
Can you pay a car loan with another loan? – Related Questions
Can you combine personal loan and car loan?
Yes, you can consolidate your car and personal loans if you qualify for a larger loan. Usually it’s easiest if you own a home with enough of an equity cushion to borrow against it. However, you can consolidate even if you don’t own a home.
Does consolidating your debt affect your credit score?
Debt consolidation — combining multiple debt balances into one new loan — is likely to raise your credit scores over the long term if you use it to pay off debt. But it’s possible you’ll see a decline in your credit scores at first. That can be OK, as long as you make payments on time and don’t rack up more debt.
Can you use debt consolidation for personal loans?
Personal Loans and Debt Consolidation Loans
A debt consolidation loan is a type of personal loan—it’s used to pay off several debts, streamlining your monthly payments into one fixed amount. Both types of loans offer lower interest rates compared to credit cards.
Why can’t I get a debt consolidation loan?
As already discussed, there are three major reasons why people are denied debt consolidation loans. They don’t make enough money to keep up with the payments; they have too much debt to get the loan, or their credit score was too low to qualify.
How does debt consolidation work?
Banks, credit unions, and installment loan lenders may offer debt consolidation loans. These loans convert many of your debts into one loan payment, simplifying how many payments you have to make. These offers also might be for lower interest rates than what you’re currently paying.
What are the interest rates for refinancing a car?
What are today’s auto refinance rates? For today, October 29, 2022, the current average auto refinance rate for people with Excellent credit is 3.09% for a 36-month loan, 3.24% for a 48-month loan, 3.27% for a 60-month loan, and 3.62% for a 72-month loan.
How can I lower my car payments without refinancing?
3 ways to lower your car payment without refinancing
- Request a loan modification. Contact the lender to explain that you are struggling to stay afloat financially and risk falling behind on your auto loan payments.
- Trade it in for a less expensive car.
- Sell privately and buy a less expensive car.
What is a good interest rate on a 72 month car loan?
The average 72-month auto loan rate is almost 0.3% higher than the typical 36-month loan’s interest rate for new cars.
Loans under 60 months have lower interest rates for new cars.
| Loan term |
Average interest rate |
| 60-month used car loan |
4.17% APR |
| 72-month used car loan |
4.07% APR |
Is refinancing a car worth it?
Refinancing and extending your loan term can lower your payments and keep more money in your pocket each month — but you may pay more in interest in the long run. On the other hand, refinancing to a lower interest rate at the same or shorter term as you have now will help you pay less overall.
Does refinancing a car start your loan over?
Refinancing does start your auto loan over. When you refinance a car loan, you choose a new loan that has a different rate and possibly a different term. The new loan replaces your current loan. Refinance terms offered by lenders most commonly are from two to seven years.
How long before I can refinance my car loan?
At least 6 months into the car loan
This way, you’ll have time to build a good history of on-time payments. Some lenders require six to 12 months of on-time payments before they’ll consider a refinancing application.