Question:

How do i lower the monthly payments on my car?

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i owe about 9,000 on my car. it's a chevy cobalt LS sedan 2007. it has a little over 40k miles on it. my monthly payments are destroying me. would my lender (gmac) lower my payments somehow? i pay about 430 a month and i need to lower it to about 250 to 300.

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  1. There is no way your lender is going to reduce your payments by $150 a month. That's almost 35% reduction.

    There are two ways to reduce your payment. Both by refinancing.  You can try to qualify for a lower interest rate but even a full 2% reduction in the interest rate will only lower your payment by less than $20.

    The only real way to lower the payment is to extend the loan terms.  You don'tsay how much time you have left to pay but let's assume you have 2 years left to pay off that $9000.  You can add more time to the laon and then you'll be back to a 5 year loan.  You can lower your payment by about $130 doing that.

    BUT you have to look at the negative side of that option.  Will you keep that car 5 years from now?  Will the extra interest you pay (by extending the loan terms ) be worth it in the long run.  You'll pay an additional $1400 - $1500 in interest on the loan in those extra 3 years.  

    My advice to you is to get a second job and start throwing all the extra money you can at that loan to get it paid off quickly.  By delaying the inevitable it will only cost you more money in the long run.  It's a pay now or pay later situation and you're better off sticking with the loan you have and just get aggresive and pay it off as soon as you can.


  2. Go to your personal bank, where you do your checking, ask them for a new loan to payoff the old loan, with a 60 month term (5 years) this should make your payment about $225 a month if you have decent credit on a $9000 loan. The only problem with this is you will owe 5 more years on the car.

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