If someone has experienced a sudden change in his income and has fallen behind on his auto loan payments, he might want to check out how to qualify for auto loan modification.

Phoenix, AZ -- (SBWire) -- 05/15/2013 --To help him out, Credit-yogi.com is here to furnish information about this process, including:

- Is it the Best Choice?
- Refinancing
- Difference between Modification and Refinance
- Qualifying for Modification

Auto Loan Modification: A Good Decision?

Auto loan modification is time-consuming, so be sure it’s the best thing to do before getting into it. One situation that merits modifying a loan is being upside down on it. This means that more is owed than the vehicle is worth and one couldn’t pay off the loan even if he sold the car. If he cannot get modification through the original lender, he should look to auto loan modification programs. These can be found easily, and they offer to help with modification. They have access to sources of funding that traditional financer do not, and so can be helpful.

Car Loan Refinancing

An alternative to modifying a car loan is refinancing it. When a loan is refinanced, it is completely paid off and another one that has better terms and rate is drafted. Refinancing the auto loan is generally done for similar reasons as modifying it, but in some situations, refinancing is the better option. This is why many lenders often advertise their auto refinance interest rates. These rates can vary from lender to lender and city to city. Take some time to compare them, as doing so can save hundreds of dollars per month.

Understanding Modification and Refinancing

As defined above, refinancing is paying off the old loan and drawing up a new one. Modifying a loan is making changes to it, which may include lowering the interest rate or reducing the principal of the loan. Both processes can be accessed through most lenders. There are also online auto refinance and modification companies that can help those who wish to make their monthly payment lower.

How to Qualify for Modification

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The answer to how to qualify for auto loan modification is to gather up all of the documentation one has regarding the loan, the financial hardship one claims to have, and one’s ability to afford a reduced payment. No lender will even begin to process an application without this proof of circumstances. Fill out each form completely and truthfully, answer any other questions honestly, and then wait for approval.

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