REFINANCING UPSIDE-DOWN

If you discover that your car loan is upside-down, there is little you can do. When a car loan is upside-down, this means that the value of the car is less than what you owe on it.
There are a few reasons why your car loan is upside-down. If you took out a car loan for five years or more, chances are you will owe more in interest than you will on the car. Most of your monthly payment is going toward paying off those interest costs. This is the same if you had bad credit when you bought the car and were forced to take a higher interest rate. While your payments have been manageable, you have been paying a lot more in interest than you could have been paying if your credit was better. Upside-down loans can also occur if you paid too much for a car. This can happen when you are buying from a private seller. If you do not check the blue book value, you may find yourself overpaying for a car.