Carbuyer Stunned Upon Discovering Auto Loan Balance Shows $14,000 After Nearly $19,000 in Payments Made

Sharee B.

A Missouri resident woke up to quite a surprise the other day when they checked their account balance on their auto loan.

The borrower, a Redditor stated that they had been paying on the original loan amount since the car was purchased in the fall of 2018. After four years of consecutive payments, with an occasionally missed month, the total balance paid on the loan was $18,627.60, which amounts to several thousand over the price of the vehicle.

It's likely that the car owner didn't expect the auto loan to be cleared when taking interest charges and loan fees into account. However, they couldn't believe their eyes after seeing the payoff amount of $14,174.38 due after diligently sending in 43 payments of around $450 each month alongside dealing with other financial obligations.

According to research, consumers are being placed into subprime auto loans at an alarming pace. These borrowers are paying with interest rates stretching between 10.87% and 30% in many cases, adding as much as $1627 to their monthly budgets for the vehicle payment alone. In addition, the default rates for these types of loans are 1 in every 12 individuals as subprime loans force buyers to pay up to 2.5 times the value of the actual vehicle.

The Redditor is also facing a possible repossession, which is common in the subprime lending industry as millions struggle to keep up payments within the first six months of the loan. For now, they are faced with an exorbitant interest rate, an upside-down vehicle loan, and a glimmer of hope at refinancing.

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