Two words: Auto loans.

The auto loan was officially born in 1919 when General Motors established the General Motors Acceptance Corporation, but it didn't really become popular until much, much later. Nowadays, it's pretty much necessary – the average new car now costs $36,000, meaning less-discerning buyers could get themselves into a pinch if they're not careful. As you probably already know, the value of your new car freefalls the minute you drive it off the lot, and unless you put a substantial amount of cash down, you could really get stuck (p.s. don't forget gap insurance). So if you're struggling to make your payment, or you just want to increase your debt-to-income ratio, the good news is that you can help lower your monthly payment by refinancing – here's what you need to know. 

Refinancing a car loan is exactly what it sounds like. You're taking what you owe on your car and getting a loan on that. By doing so, you can achieve a lower monthly payment but you extend to the length of the loan. You might even be able to secure a lower interest rate. The thing to keep in mind, though, is that some lenders won't refinance vehicles with a significant amount of miles on it. In some cases, that means vehicles that are seven years old and have more the 75k miles on the odometer. 

The other thing to keep in mind is that applying for a new line of credit could affect your credit score. Of course, defaulting on your payments is worse – your payment history makes up 1/3rd of your credit score – so if you're planning on buying a house soon after, you might want to hold off and take care of your immediate payments now. 

As always, it's best to go to your local bank and talk things over with a personal banker. 

What are your thoughts? Do you have anything else to add? If so, let us know in the comments below!

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