Help! my car loan is with a 21% interest rate what do i do ?
My son financed a 2004 Monte Carlo SS for 10,500 with a 21% interest rate. I am his mom and I co-signed for him. His credit score is a 540 and mine is a 590. They told us at the time of the purchase that we could refi in 6 months well it has been 7 months and we tried to refi with the credit union and our local bank and they both laughted at us. and said the car is only worth 7,000 dollars. The payment each month is 288 with very little going to the actual payment. They laid him off at his job and now I am stuck trying to pay each month. They are going to let him come back to work in mid May but that is a while away. We have already missed Marchs payment it was due March 16th. Should I call the bank and tell them we cant pay until the end of May? and how long until they do a repossesion. We really want to keep it but when we are done paying the total will be 17,000 dollars. I work a full time job and have a house payment plus bills. Somebody give me some good advice. Yes I know We screwed up so please dont rub it in. Thanks for any advice.
Answers & Comments
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For you, there's not much that can be done. Tell the lender that they now own the car. Tell them that you were lied to when they said you could refi in 6 months. Tell them that you lied when you said you could afford the payments. They'll come an repossess the car and hold you responsible for the remaining balance after they sell the car to themselves. Then they'll resell the car to another person who can't afford the car.
For others hopefully before you get into this type of mess:
Don't ever finance your car through any car dealer, especially a "buy here, pay here" dealership.
Don't EVER believe ANYTHING a CAR DEALER tells you. Their only interest is to sell you the car whether you can afford it or not. If it isn't in writing, it isn't worth the paper it's written on.
Arrange your own financing. If you want it done right, do it yourself.
If you can't get your own financing, you can't afford the car.
Give the car back. It is apparent that you cannot afford it, and things are only going to go from bad to worse if you try to hang on. Most likely, if you financed through this dealer, they are not going to let you take a month and a half off while he gets his finances in order. They should have NEVER EVER told you you could refinance the car in 6 mos..that was an outright lie, because there is NO way with those credit scores you would have raised them by enough to get a loan on your own..besides that, only 6 mos into a car loan with that high of interest you probably didn't make a dent in the principal, and the loan is upside down where you owe more than the car is worth. That is why the bank/credit union laughed at you.
I would give the car back, and buy a cheap transportation car until your son can get his own loan.
Your credit isn't going to get much worse than it is already, so I would save the headache of trying to fix it and just give the thing back.
When he lost his job and before you went behind you should have called explained the situation and most likely could have had the loan postponed for 90 days, ir would collect interest and there would have been a small fee but you would be in a better position than you are now, and the credit scores would not have taken another hit. Call them and see if something can be worked out
most banks let you put the payment on the end ....they will allow you to have a few missed payments here and there
call the bank and tell them you can't pay , you need a better deal or they can take it back , your credit is bad already so a repo doesn't matter to you much
You have one option:
Turn over the keys. You can't afford this car. Give it back and buy a junker.