How to Exit a Car Loan Early in Stoney Creek
How to Exit a Car Loan Early in Stoney Creek
Posted on August 18, 2021
Auto loans can last for years. What was affordable and practical at one time could be anything but later on. So, can you exit a car loan early? How does it work? Will it hurt your credit score?
Our Stoney Creek auto loans team outlines your options if you want or need to exit a car loan early.
Exiting a Stoney Creek auto loan early
Auto loans are fixed contracts but they mostly offer the opportunity to get out of them early if you need to. You will need to fulfil certain obligations but it is usually possible to get out of the loan.
Here’s how.
Check your loan terms
The vast majority of auto loans allow you to settle early without penalty. Some loans will charge an early settlement fee for the first year or two but after that, you should be able to exit the loan once you pay it off.
The exact terms should have been made clear when you signed up. Otherwise, your loan contract should tell you whether you’re in for early settlement fees or not.
Discuss it with your lender
We recommend discussing your situation with your lender before you do anything. They may have other ways to help you afford the loan. If your situation is temporary, a payment holiday may be all you need to get back on your feet.
If it’s something longer term or you just want it paid off, your lender will be able to provide a settlement figure while you’ll need for these other methods.
Lump sum settlement
Your first method of getting out of the loan is to pay it off. Settling early is possible on the vast majority of loans and is easy to do.
Get the settlement figure from the lender and arrange with them to make the lump sum payment into your loan account or by other means they specify.
That settlement figure will be good for 28 days or so, which gives you time to prepare and get the money together. After that, you’ll need another figure as loan payments will obviously change the amount you owe.
Refinance the auto loan
If you want out early because your current loan is expensive, you could refinance to a cheaper one.
As long as your credit score is good, you haven’t missed a loan payment and aren’t upside down in the loan, refinancing is simple.
Find out from the lender how much you still owe and find a cheaper loan that covers that amount. The process is exactly the same, just hopefully for a smaller amount.
Sell your car to a dealership
If you bought a premium car and are now struggling to afford it, you could sell the car to a dealership, pay off the loan and buy something cheaper afterwards.
You can pay off the loan and still drive a decent car that will get you to work or wherever you need to go. Yes, it will be a compromise but at the end of the day, you’ll have no loan and still have a car.
Contact Unique Chrysler for help, advice and competitive Stoney Creek car finance and leasing.
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