A Fin24 user can no longer afford the high instalments on her car. She writes:
Is it possible to return my high instalment car finance to the bank and request that they finance me with a cheaper car, in order to secure a home loan?
Rudolf Mahoney of WesBank responds:
Unfortunately it is not as simple as returning the car to the bank.
You are contractually obligated to repay the loan and the only way for you to exit the agreement is to settle the outstanding balance in full.
In your instance, it would be a lot easier to trade in your current car, which you are unable to afford, for a less expensive vehicle. Any reputable dealership should be able to facilitate this for you.
The dealers will then settle the outstanding balance on the existing account and at the same time facilitate the finance application for the new car.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
Is it possible to return my high instalment car finance to the bank and request that they finance me with a cheaper car, in order to secure a home loan?
Rudolf Mahoney of WesBank responds:
Unfortunately it is not as simple as returning the car to the bank.
You are contractually obligated to repay the loan and the only way for you to exit the agreement is to settle the outstanding balance in full.
In your instance, it would be a lot easier to trade in your current car, which you are unable to afford, for a less expensive vehicle. Any reputable dealership should be able to facilitate this for you.
The dealers will then settle the outstanding balance on the existing account and at the same time facilitate the finance application for the new car.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.