Learn the basics of managing debt with car equity
You may be able to use your car’s equity to combine some or all of your debt while possibly lowering the overall amount you pay each month.
Monthly Payment Reduction
Cars have value that can be used as equity. This equity can help car owners consolidate debt, manage unexpected expenses, or fund large purchases.
There are two common borrowing strategies at Wells Fargo using a car’s equity:
- Auto Refinance + . Adjusting a car loan through refinancing to get funds.
- Auto equity loan . Leveraging equity from a car that’s already paid off.
With these types of loans, you may be able to:
- Simplify your debts. Pay off other types of debts and potentially only have a single monthly payment.
- Take care of unexpected expenses. Pay off unplanned expenses with the available funds.
- Make a large purchase. Use the available funds if you’ve been planning on making a large purchase, but didn’t previously have the funds.
- Enjoy convenience and flexibility. Choose a different term and different payment options to better fit your needs.
- Have peace of mind. Benefit from consistent monthly payments with a fixed rate, paying the same amount each month. And you will not be penalized for paying your loan off early.
If you’re a Wells Fargo customer
You may be eligible for a rate discount with a qualifying Wells Fargo consumer checking account while maintaining automatic payments. *
*To qualify for a customer relationship discount, you must maintain a qualifying Wells Fargo consumer checking account and make automatic payments from a Wells Fargo deposit account. Only one relationship discount may be applied per application. Auto loans obtained from a dealership (where the dealer is the lender) do not qualify for the relationship discount. To learn which accounts qualify for the discount, please consult a Wells Fargo banker. If automatic payments are not selected, or are canceled for any reason at any time after account opening, the interest rate and the corresponding monthly payment may increase.
There are myths and misconceptions about accessing cash with your car’s equity. Here are some common myths debunked:
Myth: Debt consolidation loans are for those with a tremendous amount of debt or in a desperate financial situation.
Truth: You do not need to have tremendous debt to benefit from debt consolidation loans. Managing finances and consolidating loans are beneficial for many people looking to optimize their current financial situation. For example, you can consolidate as few as two credit cards with high interest rates into one low interest rate that may potentially lower your monthly payment or total finance charges.
Myth: My car is too old and has too many miles on it to have any real equity.
Truth: Cars are retaining their value for much longer than they did in the past. Consult these reference guides to see how much your car may be worth:
Myth: I won’t be able to consolidate my debt and also access funds.
Truth: In many cases, our customers are able to both consolidate debt and also receive available funds for unexpected expenses or large purchases.