There is one advantage in financial crunch because, that is the time when people think of planning their cash flow. It is also good to create a greener planet as people try to reduce the cost by turning off ACs in unused rooms! There are few people who have a dilemma of choosing auto loan modification. Their dilemma is; whether loan modification is good or bad? Is it advantageous or disadvantageous? Is it trust worthy or not? Best answer to these questions should be the testimonials from both the satisfied and not so satisfied customer.

To get a fair idea on auto loan modification, it will be better to understand when a loan modification is good and when it is not so beneficial. First, considering that you reduce the monthly payment very much, you are increasing the term of the loan. That is if you are turning a three year loan into a 7 or 8 year loan, then that is definitely a bad idea.

If the vehicle is aging and you still pay installment for it, it is better not to consider any kind of loan modification instead try to sell it off. One more reason is even the lender will not be interested in having that vehicle as collateral as it may not have enough resale value.

In some case, there could be prepayment penalty in your original loan agreement if in case you want to make a refinancing option. In that case refinancing or loan modification is not a good option.

In some rare case, there could be something called ‘Pre Computed Loan’ may exist. Here you have accepted to pay the full principle along with the interest to the lender. Exiting this option could be costly. Here too loan modification is not a good option.

There is another option of securing the auto loan with Home Equity Line Of Credit, HELOC. This could provide a chance of lower monthly payment than refinancing as usually a mortgage loan will be for 10 to 15 years. Since the mortgage secures the auto loan the interest rate will also be low. But, these days mortgage went under serious threat, so does this option. But, still this option is safe.

When your auto loan is under any of these options it is better to continue under the same. Even in this case you can try your luck if loan modification can reduce your burden. But, if your auto loan is not under any of these options it is highly advisable for you to consider auto loan modification. Your automobile, Car, Credit Score, Financial stability are very much important to have a peaceful life. Use this wonderful tool called as auto loan modification to reduce your financial burden.

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