Tips for Refinancing an Upside Down Auto Loan

Here's how you can refinance your upside down auto loan.

Being upside down on a car loan is a dangerous position to be in. Consider what would happen if the car you still owe money on is involved in a collision that totals the vehicle. You may indeed get a settlement check from the insurance company, however it will be for the amount the car was worth, not the amount of debt you still owe on the auto loan. That can potentially leave you in dire straits as you will be in the position of finding the additional funds needed to pay off the auto loan.

Strategies for Upside Down Auto Loans

The best strategy for hedging your bets against loss due to an upside down car loan is to either pay off the debt earlier or refinance your upside down auto loan. Currently, interest rates are at historic lows and you may be able to save thousands of dollars by refinancing your auto loan. If refinancing an upside down auto loan is something you are considering, there are a couple of options to choose from to help flip the ownership status of the vehicle in your favor.

If You Qualify for a Low-Rate Auto Refinance Loan

Tips for car owners who qualify for a low-rate auto refinancing loan:

    • By securing a low auto loan refinance rate and maintaining your current monthly payment amount, more money will be contributed towards the principal and the loan will be paid off more quickly
Save for Your Future


  • Secure an auto refinancing loan with shorter overall terms of repayment, increasing your monthly payment and ending the whole repayment process earlier



When a car loan is upside down, the car owner owes more on the vehicle than the vehicle is actually worth at the time. For the first few years of any auto loan, that is a common experience, but the disadvantage of longer term loans (5 years +)with their enticing lower monthly payments are that the process of being upside down in an auto loan is much higher. If you are interested in searching for an auto loan refinance, begin your search with Go Banking Rates.//

Share this article:

facebook sharing button
twitter sharing button
linkedin sharing button
email sharing button

About the Author

GOBankingRates Staff

These articles are written by the in-house GOBankingRates team.

Read More


See Today's Best
Banking Offers