Help! Need to get out of my 21.5!

[Anonymous]

I don't know why I waited so long to ask for help here.  I think I am in one of the worst situations and I am here to get some serious help to get me out of this loan.  Here is my situation:

Two and a half years ago I made the biggest mistake of my life by walking into the dealership and ended up leaving with the worst deal of the century, although I did not realize it at the time.  It was my first time buying a car and I was by myself and knew nothing about buying a car.

I had no money but somehow drove off the lot with a used 2006 Acura RSX Type-S with just a promise of a $1,100 downpayment that would be paid in one and a half weeks.  My credit score at the time was 550.  I got stuck with a 72 month loan at 21.5% APR which came out to $583.71/month.  Now I have been paying this loan for two and a half years but I do not think I can pay this car for another year.  I realize my credit is very important to me and I can say that my good paying habits have shot my score up to 700 now.  I have not had a late payment on my auto loan or any other credit card in 4 or 5 years now.

I cannot believe how long I have been paying nearly $600 a month plus $100 a month for an Acura, which is 50% of my income!  Please help me get out of this awful loan.  I would appreciate any advice.

The REALISTIC options that I have thought about are:

1)   refinance the car.  the only problem I have with this is that I have paid almost three years of the six years on the car.  refinancing would cause me to start another 4-6 years.  I will be coming across a few thousand dollars with in the year and I thought I could use that money to put down into a refinance OR use it to keep paying the monthly on the car.

2)  sell it privately and come up with the difference.  the problem with this is that at best my car is worth 16,500 privately.  I owe 19,500.  Then in the end I would not have a car to drive.  I need a car cause I go to school and work and am very busy.  I thought about a moped but I take the highways.

Thats all for now.  If you need more info to help please do not hesitate to ask me.  

[cdtotten]

I don't know if they still offer it, but when I joined Alliant Credit Union about 8 months ago, they had a big promotion going on for refi'ing existing auto loans at around 4.5%. I would see if that is still going and apply if they are. You just need to have a savings account with them (minimum 5 dollars) and they will do an EQ pull when you open the account. The good thing is, they will usually use your membership application pull for any loans you wish to take out within the first month, so save yourself a little there.

Unfortunately you are already upside down in the car do to the interest rate and probably won't recover. Whatever you do, don't purchase a new car and roll the negative equity into that loan.

[Anonymous]

I would definately suggest trying a refi. If you have had perfect payments with that score you should have no problem refinancing and probably be able to get a single digit interest rate. Yes this may add 1 year or 2 years to your loan but if you reduce your rate by 15% you would save hundreds a month in payments and thousands in interest in the life of the loan. Then whenever you get chunks of extra cash pay them toward the principal and pay it off faster. The problem for you is so much of your payment is going toward interest you arent making much headway on the loan. If you refi at a much lower rate more of your payment will go to the prinicpal of the loan therefore reducing your interest payment by more every month and making bigger dents in that amount owed. Even adding a year or two you will come out way ahead you need to get out of that loan that is ridiculous.