1. It is my understanding from auto insurance company (State Farm- in Georgia) that we will be responsible for a lump sum payment on difference between estimated value of vehicle and loan value(totaled car). Anybody with experience in this situation know how long you are given to produce this amount.(Immediately, 30 days,etc).
  • This is a good question for your Leinholder to answer. Typically, you have up to 90 days (dependent on who owns the loan) to either pay the remaining balance, roll the remaining balance into a new loan (if there's enough collateral value to allow it), or default on the loan. – GOATNine Jun 8 '18 at 19:42

The paperwork connected to your loan should explain the deadline for paying off the loan when there is a lump sum settlement. Because of the loan expect that the check from the insurance company will either be sent directly to the lender, or it will be in the form of a check with you and the lender on the pay to the order of line.

If you can't find the information in the lending documents, then ask the lender what the policy is.

This is the danger of being upside-down on the loan. When the value of the car is less than the amount due on the loan, then if something happens to the car you have a short window of time to come up with the difference.

When some car buyers are upside-down on a loan, they are able to find auto dealers and lenders who will allow them to essentially trade in the old car and then buy a new car, and end up being even more upside-down on the new car. This isn't exactly your situation becasue you don't have a car to trade-in.

If this is just a question about a potential situation,, then it is probably a good idea to either make some additional payments to get the loan balance under the value of the car, or to set aside money in case this happens and you need to payoff the loan balance quickly.

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