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Car modifications are loan modifications that help you better afford your monthly payment. If the idea of a loan modification scares you, then you'll be relieved to know that many people go through this process and it helps them fix their credit and avoid repossession.

Car modifications involve several steps. First, you have to be behind. Lenders don't negotiate loan modifications with people who are making their payments on time. If you're keeping up right now but you fear falling behind in the future, and currently your credit is good, you might choose refinancing or loan consolidation instead. Or if your car is worth more than you currently owe on it, you could simply sell it to pay off your loan and purchase a car that costs less with smaller payments.

But if you are falling behind and you're having financial difficulties in keeping up with your car payments, then you're the perfect candidate for car modifications. Your credit doesn't matter because it's expected that when you're in a hardship situation you're going to have credit problems. If you try to refinance with poor credit, you either won't get the refinancing loan or the interest rate will be higher than you expect making it not worth your time or money to do so.

If you look for a car loan modification, your lender will want to see proof that you really are in a financial mess. If they can look at your financial records and see that you have plenty of money for the car payment but you're squandering it away, they're not going to want to grant the modification. They usually have a limit as to how much extra money is left over each month after all of your bills and living expenses.

If you have more than that amount left according to their calculations, you may not qualify.

So before you look into a car loan modification, it's important to really examine your finances and make sure you can't simply find the money for the payment in the amount you already earn. The lender will be looking at this information very carefully, so you want to anticipate that and make sure you've left no stone unturned