Can You Refinance a Car If You Are Behind On Payments?

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The CarsDirect editorial team is dedicated to providing our readers with the latest on new and used cars, expert opinions on which vehicles make the grade, and all the fun stuff in between.


- May 26, 2016

If you feel that you cannot make the payments on your car, it’s a good idea to refinance the car payments. Here is how you can refinance a car in a few easy steps.

Find out what rates you can get for refinancing >>

Get In Touch With The Lender Immediately

Most lenders will work with the customer to ensure they make their payments on time. You can carry out an auto loan refinance deal to ensure you pay off your car loan. But they will want to know the reason for the inability to pay.

Loan Extensions

Most lenders have a policy of deferring payments for 30 days to give you a chance to catch up with payments. In an ordinary loan extension, the lender will take the payments you have missed and add them to the end of your loan time period. This will extend your loan and give you a short period of time in between where you can get your finances in order. Please note that not all lenders have loan extension plans.

Refinance the Loan

This essentially means you will have to take on a new loan with a higher interest rate, but spread out over a longer period of time. It will mean lower auto loan payments monthly but a longer loan time period.

But there are other ways around the problem too. If you cannot make the payments, then what you can do is check the value of the car. Then compare the payments you have made compared to the current value of the car. Most of the time, the payments that have been made are much lower than the current market value of the car. You can then opt to sell the car and reclaim the money to pay off the loan.

See your auto loan refinancing rates now >>

The CarsDirect editorial team is dedicated to providing our readers with the latest on new and used cars, expert opinions on which vehicles make the grade, and all the fun stuff in between.


Loan approval is not guranteed and is subject to credit application and approval of the lender. Individual loan terms may vary.