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Posted in Auto Loans
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Question By
krick1982

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need car advice
We upside down (owe 10k worth 6k) and behind on payments on a car loan, one of those second chance really high interest car loans. We've made about 18 payments on a 5 year loan and barely made any dent on principle. We have the money to catch up, buy are considering letting it go, and buying something cash. Our home lease ends in 6 months and are afraid of how it will affect the credit and how it looks to landlords. If we catch up and pay the car off then that eats up our savings for moving costs, but if we let it go it looks bad on the credit report. We're in the midst of trying to repair credit, small credit cards everything else is being paid in time or being repayed.

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You are in the midst of trying to repair your credit and you are considering letting a repo fall onto your reports in addition to opening up yourself to be sued? Letting them repo the car is not going to get you off the hook of paying. They would repo the car, auction it for less than it is worth and then come after you for the remaining balance on the loan. If the car is worth six grand, it may bring four grand at auction, leaving you on the hook for two thousand there plus the four thousand that is underwater to bring an estimated six thousand dollar debt that they may sue you for.

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The best thing that you can do is to get the loan paid down so it is not "underwater" any more and either refinance or sell the car and get out of the bad rate deal. Just an FYI, a repo will really hurt your credit. You better take some time to do some reading and re-evaluate your situation.

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