If you can no longer afford the payment on your car loan, there are a few ways to lower the amount you pay monthly. One of the most common methods for achieving a lower car payment is refinancing through a lender. This may involve trying to get a lower interest rate, which should save you money both monthly and over the course of the loan. On the other hand, you can also ask to have the loan term extended, which would allow you to make lower payments monthly while paying more in interest over the life of the auto loan. If your lender will not work with you to lower your payment, you can shop around for a new loan with a lower interest rate so that you can pay off the initial car loan.
A lower interest rate can sometimes be negotiated if your credit has improved since you bought the car. If you have been paying all your bills on-time for a few years since you got the original auto loan, you should check your credit score to see if it has increased. If so, you should call your lender and request a lower interest rate, which would save you money every month. It would also lead to you paying less over the life of the loan, which is why this is often the wisest method of getting a lower car payment. Unfortunately, most lenders do not often allow borrowers to refinance their cars, especially if they do not have stellar credit.
It may also be possible for you to refinance the loan if you are willing to pay more money over time. You can request to extend the loan term from the typical 48 months to 60 or 72 months, which would lower your monthly payments. Of course, you would end up paying more for the car since interest would accrue during that time, which is usually why more lenders are willing to go this route rather than lowering the interest rate. For this reason, this method of getting a lower car payment is not typically recommended unless you are sure that your financial situation will improve in the future so that you can start paying more on the car monthly.
Some lenders refuse to make changes to the original loan, but you have one more way to possibly get a lower car payment. This is by making it your objective to pay off the auto loan altogether, replacing it with a personal loan that has a lower interest rate. You can usually compare the rates of various banks and credit unions near you to find a rate that results in a monthly payment that fits within your budget, thus allowing you to end up with a lower car payment.