Stuck in something I don't want. What could I do?

[Anonymous]

Okay, 

So I have a 2010 Toyota Corolla LE with about 65,000 miles on it. I bought it for $13,500 before interest and withOUT GAP. My monthly payments are $455 a month. I have had this car since June of 2013. My interest rate is beyond the roof, of 24.3%. This was my first car and without any guidance on what was a good deal or not I signed. So it has been two years of owning this car, I have made a total of $10,920 and STILL owe $15k. What do I do? I want to get out of this horrible situation. I dont have the greatest credit score either I'm 595 for both equifax and experian. Then 611 for my transunion. I tried to refinance and was told no bc I owe more than it is worth. I also tried to trade it in and was told the value of my car is $8500 and I would need to put a down payment of $7000. I just want advice. I need it. I make these monthly payments and dont ever see the balance go down.

If anyone could offer good advice, it would be greatly appreciated. 

[Hoya08]

That doesn't sound right...

After 24-months of on-time payments, your orginial note of $13,500 is now $15,000?  What was the total financed and for how many months?

Or are you saying you have $15,000 / $455 ~ 33 months left for a total of $15,000?  If this is the case, your current loan balance is under $8,000.

[pt145]

You need to pay this loan down to where your closer to the value of the car and refinance. This should be done quickly as possible, sell some stuff, get a part time job or eat rice and beans only.  Horrible situation but you can dig yourself out if you sacrafice, there's no easy way.

[Anonymous]

Who are you making those payments to? Have you paid late at all? What state do you reside in?

At 24.30% you would need a loan of 17,200 for 72 months to come up with that payment. And after 24 months of on time payments you would owe just under $14,000.

Where did you go that you were told you need 7k down? If you have any cash use it towards your loan not a new car. You may be stuck in that loan for a bit. Try paying bi-weekly payments of 228 if you can. That will cut the interest down (it accrues daily) and you will end up making 13 payments a year. Anything at all that you can throw at this loan will help, that interest is very aggresive (in the bad way).

[black_citi]

OUCH!! One of the highest rates I have seen. Only my cousin had a higher rate (32%).

Do you have any money saved? If you can put 3k towards your loan and then try to refinance with a credit union you should be golden. Everyones situation is different but I was able to refinance my 2012 Impala in April 2014 with DCU. My original loan amount through Santander was 14%, 430 a month. I bought the car July 2013.

My new loan in April 2014 was 339 @ 6.7% then I refinanced again with DCU to my current 278 @ 2.2%. Sometimes it may be good to refinance 6-8 months after you buy. Sometimes.

Like everyone else said, try to save and put it towards that negative equity.

[Anonymous]

Some people need to check their math before giving advice....

if his payments are 455 for 72 mos, thats $32,760.00 total loan. Which if you do the math, 13500*.234 = 3159 * 6 = ~18,000.00 in interest alone.

You got hosed bro. You still have $23,000 to go on that note, so of course they want $8,000 down even with a trade in.

You are going to have to suffer with this car unless you save up and pay it down. Your best bet once your scores get up is to get a personal loan for a cheap rate, pay that principle down to where you need it (with that kind of loan though there might be an early termination fee for paying it down too fast). and then trade it in. Granted, you'll now have two loans, but in the long run you won't be suffering as much.

Do you work somewhere with a 401k? The loan rates you can get on your 401k are pretty solid. With Voya I am about to get 1.99% for a yearly loan thats paid with pre-tax deductions from my paycheck each week. You really cant beat it.

[antso91]

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@Anonymous wrote:

Some people need to check their math before giving advice....

if his payments are 455 for 72 mos, thats $32,760.00 total loan. Which if you do the math, 13500*.234 = 3159 * 6 = ~18,000.00 in interest alone.

You got hosed bro. You still have $23,000 to go on that note, so of course they want $8,000 down even with a trade in.

You are going to have to suffer with this car unless you save up and pay it down. Your best bet once your scores get up is to get a personal loan for a cheap rate, pay that principle down to where you need it (with that kind of loan though there might be an early termination fee for paying it down too fast). and then trade it in. Granted, you'll now have two loans, but in the long run you won't be suffering as much.

Do you work somewhere with a 401k? The loan rates you can get on your 401k are pretty solid. With Voya I am about to get 1.99% for a yearly loan thats paid with pre-tax deductions from my paycheck each week. You really cant beat it.

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I am terrible with math but that doesnt sound right. When you finance a car you dont take out a loan for the amount plus interest, you take out the loan for the car plus taxes and fees. You pay the interest per payment. So his loan wouldn't have been 32k, thats just what he would have paid back after the 72 months at 455.

For example, when I bought my first car (worst decision I had ever made) I had an interest rate of %15.99. The cars price as agreed was 16k with tax and fees included at 380 a month for 72 months. My loan amount was for 16k, not the 20 something thousand it would have been after the 72 months.

Even still, his math doesnt add up with what is still owed on the car.

[Anonymous]

Right right, you only take a loan out for the amount of the vehicle + fees and tax.

The 32k is the order of magnitude cost of the loan which is principal + interest.

Most car loans amoritize, so the payments are lopsided to paying off mostly interest at first, and then shifting to mostly principle towards the end. They are also calculated on simple interest, so each month usually they take the ((rem principle * interest rate)/12) * remaining months on the loan to calculate remaining interest. Remaining interest + remaining principle divded by remaining months determines your payment.

Thats why its so beneficial to double down early on, or throw a giant payment into the mix.

[TitaniumCash]

Do you have any family or close friends you could borrow some money and pay off a huge chunk, then try to refinance. Sounds like you have a huge hole filling up with water and you have a tiny spoon to use

[Hoya08]

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@Anonymous wrote:

Some people need to check their math before giving advice....

if his payments are 455 for 72 mos, thats $32,760.00 total loan. Which if you do the math, 13500*.234 = 3159 * 6 = ~18,000.00 in interest alone.

You got hosed bro. You still have $23,000 to go on that note, so of course they want $8,000 down even with a trade in.

You are going to have to suffer with this car unless you save up and pay it down. Your best bet once your scores get up is to get a personal loan for a cheap rate, pay that principle down to where you need it (with that kind of loan though there might be an early termination fee for paying it down too fast). and then trade it in. Granted, you'll now have two loans, but in the long run you won't be suffering as much.

Do you work somewhere with a 401k? The loan rates you can get on your 401k are pretty solid. With Voya I am about to get 1.99% for a yearly loan thats paid with pre-tax deductions from my paycheck each week. You really cant beat it.

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Keep in mind posters are providing inputs based upon what the OP provided. 

As such, you also made assumptions to your math which you inferred as correct and everyone else is incorrect: the OP never stated he/she had a 72-month note. 

If OP has not made extra nor missed any payments, a $455 per month at 23.4% with a Principal of $13,500 yields a ~45 month note.  You can check my math via excel =NPER(.234/12,-455,13500) or any online calculator using the variables provided by the OP.  At the end of 24-months with the numbers provided, OP has around a $8,000 balance, not $15,000.  Thus the comment on how the OP figured $15,000 and to state the financing terms.

From the numbers OP provided, total interest is $455 * 45 - $13,500 = $6,975. 

If the OP financed $17,524 at 23.4%, then a 72-month note is most likely.  In this scenario, OP will pay around $15,000 in interest and, after 24-months, will have a balance around $14,000.

As you suggested, "people need to check their math before giving advice..."

In your scenario, you calculated interest incorrectly.  The correct method is total payments minus the orginial loan principal: $455 * 72 - $13,500 = $32,7600 - $13,500 = $19,260.