Car loan rate of 18 percent is too high

Dear Terry,
I am one of a group of people assisting an elderly client in post-Katrina New Orleans by rebuilding her house. In January, she got a car loan from a dealer for 18 percent interest over 65 months. This is more than she can take at this point, and I was wondering what we can do to help her. Should we encourage her to refinance her auto loan, and if so, how? Also, could she take out a home equity loan (she owns the house we are repairing) to pay off the principal as there is no penalty if she does so?
-- Colleen

Dear Colleen,
You can refinance a car loan by talking to any bank or lending institution.

Without knowing your client's credit status, an 18 percent car loan appears outrageous for anyone with even a moderate credit rating. If she has equity in her home, then she could certainly use that to pay off the loan, although I don't usually recommend tapping a home's equity to buy a depreciating asset like a car. Good luck, and thanks to you and your group for helping this lady.

This week

• Car incentives often hidden -- but they exist • When a leased car is repossessed is there an early termination fee? • How can an elderly woman get rid of an 18 percent car loan rate? • My son still owes $5,000 on a car he totaled. What can he do?

If you have a question for Terry, e-mail him at Driving for Dollars. Save money on your car -- sign up for Bankrate's new weekend Car & Money newsletter