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In order to cut down our monthly expenses we are looking to sell our car. We still owe $12,000, kelley blue book says its worth around $10,000 and we don't have $2000 lying around to cover the gap.

If we sold the car and used the money to pay down the loan, would we be able to continue making payments on the $2000 balance until it is payed off?

If not, is there a good option (other than a personal loan) to refinance the balance in order to reduce the monthly cost, thereby accomplishing or primary goal?

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    Please consider that you will need a car if you sell it. You will need more than the 2K to replace this transportation. Also, how soon can you pay off this loan? That is relevant. By cutting other expenses, and perhaps working a second job can you pay this off in less than 1 year? – Pete B. Jan 6 at 17:16
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    We have a second car and can make do with that. We have cut our other expenses and I am looking for a second job. If we continue paying what we've been paying on the car the 2K loan would be payed off in about 6 months. If we refinanced with lower monthly payments (so we can get by month to month), it would, of course, take longer. – WillRoss1 Jan 6 at 18:41
  • @WillRoss1 As you have a 2nd car, you might be able to use that as a collateral. See my updated answer. – glglgl Jan 6 at 19:12
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    Which exact part is the expense you trying to cut down with that? Insurance? Parking? or just cost of the loan? or something else? – Alexei Levenkov Jan 7 at 1:06
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If we sold the car and used the money to pay down the loan, would we be able to continue making payments on the $2000 balance until it is payed off?

That depends on the loan you have. If the loan is secured by your car like most auto loans, it would have to be converted to a different loan, probably unsecured (resp. refinanced with it). That probably leads to a higher interest rate because of higher risk for the lender.

If not, is there a good option (other than a personal loan) to refinance the balance in order to reduce the monthly cost, thereby accomplishing or primary goal?

If you don't have the money, you'll have to take a loan in one or another way, be it with your credit card or, as you phrase it, with a personal loan.

As you have a 2nd car, it might be possible that you use this as a collateral for your lender. This way, you might be able to keep the lower rates.

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