How Auto Refi Can Help If You’re Behind on Payments

Dakota DeRego
Jul 18
3 min read

Falling behind on your car payments can feel like being stuck in traffic with no exit ramp. The stress piles up, the late fees grow, and you start thinking, “Is my car about to be repo’d?” But before you panic—or worse, Google “how to live without a car”—there’s a surprisingly helpful option: auto refinancing.

In our latest episode of Keys, Cash & Car Chaos, hosts Jamie and Taylor (our pint-sized co-host and their full-size financial sidekick) get into what to do if you're behind on your car loan—and how refinancing might just be your lifeline.

What Does It Mean to Be Behind on Your Auto Loan?

If you've missed a car payment by even a few days, you’re considered delinquent. While one missed payment might not be the end of the world, multiple missed payments can:

Lower your credit score
Trigger late fees
Put your vehicle at risk of repossession

The longer you wait, the fewer options you may have. That’s why acting early—even if you’re only one month behind—can make a huge difference.

How Auto Refi Can Help If You’re Behind on Payments

Here’s the breakdown of how refinancing can actually help if you’re in the red:

1. It Can Lower Your Monthly Payment

By refinancing into a longer loan term or better interest rate, you can instantly reduce how much you owe each month—giving you room to catch up financially.

2. You Might Be Able to Roll In Missed Payments

Certain lenders allow you to include your missed payments (also called arrears) in your new loan. This clears your past-due balance and resets the clock without penalty.

3. You Can Avoid Repossession

Even if your car hasn’t been repossessed yet, you’re still at risk. Refinancing can help you avoid losing your vehicle by restructuring your loan before collections take over.

4. You’ll Save on Late Fees and Interest

Once you refinance, you stop racking up late charges and extra interest. It's like pushing the reset button on a chaotic loan situation.

5. You Can Rebuild Credit Over Time

A new, on-time loan gives you a chance to rebuild your credit score. A lower score might get you a higher interest rate initially—but making consistent payments can flip the script in your favor long-term.

A Quick Reality Check

While refinancing is a great solution, it’s not guaranteed for everyone. You’ll still need:

A vehicle that holds value
Proof of income (even side hustle counts!)
A lender that specializes in non-perfect credit scenarios—like Digital Auto Refi Co

If you’re already in collections or your car has been repo’d, options are more limited.

That’s why early action is everything.

Here’s how:

Lower Your Monthly Payment: By extending your loan term or securing a lower interest rate, refinancing can give your monthly budget some breathing room.
Catch Up on Missed Payments: Some lenders allow you to roll missed payments into your new loan balance—buying you time and preventing repossession.
Stop the Bleeding: Late fees and penalties can spiral. Refinancing halts the damage by resetting your payment structure with terms you can actually handle.

What Jamie and Taylor Had to Say

As Jamie puts it in the episode:

“Look, I’m late to tummy time three times a week. Life happens. So if your car payment's behind, it doesn’t mean you're a financial failure—it just means you might need a new plan.”

Jamie also makes a strong case for why a crying baby and a missed car payment might have more in common than we’d like to admit: both feel loud, urgent, and somehow always come at 3 AM.

“Refinancing isn’t magic—it’s math. But when done right, it feels like magic. And that’s the good kind of adulting.”

What to Know Before You Refi Behind

Not every lender will approve a refinance if you're delinquent—but some do. Digital Auto Refi Co works with a network of lenders who understand that life doesn’t always run on time. So whether you're 30 days late or just staring down a ballooning balance, you’ve still got options.

One More Reason to Refi Now...

Refinancing with Digital Auto Refi Co automatically enters you to win a 2025 Ford Raptor R or $130,000 in cash. [Jamie] has the mini battery-powered version at home. You could drive the real one.

Listen to the Full Episode

🎙️ Podcast: Keys, Cash & Car Chaos📍 Find us on Instagram @digitalautorefico🔗 Or head straight to the blog + podcast hub: https://www.digitalautorefi.com