When the American public was informed in February that 7 million fellow citizens were three months in arrears in their auto loan payments, maybe the mainstream media sources were surprised, but many of the rest of us were not. This was maybe the first red flag warning that now is a drum beat about the true state of our economy. Many in the American public are suffering financially under a heavy load of debt. Anyone who cannot make their critical car payment in this country is in severe financial turmoil and danger.
At Keel Associates, a debt solutions firm, we are aware that most all of us in the country need our vehicles in order to get to work and succeed in life. We are here to provide solutions that help consumers who are in deep financial danger due to auto loan debt.
What is the Problem? –
As we are keenly aware in this country, predatory credit card lenders have raised interest rates to double-digit levels, even for many borrowers with great credit. In the auto loan industry, new predatory loan methods are ensnaring borrowers with poor credit. An expose in CityLab reported that Americans owe $1.26 trillion in auto loan debt. That is 75 percent more than American consumers owed on auto loans in 2009. CityLab found 26 percent of all auto loans went to people with poor credit scores and low income.
NerdWallet found that, although borrowers with good credit can get auto loans for around 4 to 6 percent, subprime borrowers are often charged rates as high as 15 percent and above. Obviously, this increases both the total cost of the vehicle and the monthly payments. Couple that with the fact Motley Fool reported that the new cars are equipped with tracking technology that makes it easier for the cars to be repossessed, and you can see the horrible situation many people who have auto loans face.
What to Do? –
If you are trapped in high-interest auto loan payments, there are some important steps to take in order to secure your automobile and your mobility:
Evaluate your budget: Act pro-actively today. You need to list all of your monthly expenses and compare it to your take-home income.
Cut where you can: Unless you live in a city with a great transportation system, you likely can’t afford to lose your wheels. Are there video subscription services, cable television service, meals at restaurants, Starbucks or other things that really are not a priority? Cut those extra expenses right away, before you have to miss a payment, and your credit score slips.
Add what you can: Can you take on a small gig that will help you make that all-important payment? There are a lot more opportunities available in the gig economy today but realize realistically that many are low paying.
Sell what you can: Are there expensive “toys” you bought in the past that you no longer use? Now is the time to sell as many as possible on Craigslist or eBay until you can shore up your finances.
Get a debt consolidation loan: A debt consolidation loan is a personal loan, often at a lower interest rate. You can often consolidate your high-interest auto loan, credit card debt and other debts into a lower interest loan. This allows you to make one payment for all of your debt that is lower each month. Also, by placing your credit cards on the loan as well, you can wipe all of the debt out over time for good. At the high interest rates of most credit cards today, they are very difficult to ever pay off.
At Keel Associates, we specialize in helping consumers struggling with high-interest debt and heavy debt loads. Contact us. We are here to help