Refinance with negative equity (underwater)
If you owe more than the car is worth, refinancing can be limited or expensive. This page explains why and what inputs matter.
Why it gets harder
Many lenders cap LTV (loan-to-value). If the new loan must pay off more than the car’s value supports, approvals may be limited or rates/fees may worsen.
What can change the outcome
- More accurate vehicle value (not optimistic listings)
- A payoff quote (payoff can be higher than “balance”)
- Reducing the balance (extra principal) before refinancing