Short-term loan better than dumping car

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Dear Terry,
I financed a used 2001 Mazda Tribute for my husband in November 2007. Now, the transmission has blown. The cost of the repair is around $2,000. We do not have the money to fix the car and the outstanding loan is around $7,000.

I have good credit but I am considering turning in the car to the financing bank. What do I do? I am very concerned — I don’t want to destroy my credit.


Dear Tanya,
Whatever you do, don’t turn the truck back into the bank. It will damage your credit just the same as if the bank repossessed it. Look into a short-term loan to fix the transmission, if possible.

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