Auto loan debt relief options — what's best for you?

If your auto loan payments have become too much for your budget to bear, you should consider your options for auto loan debt relief. This can involve anything from modifying your loan to surrendering your car. Here are some strategies for dealing with an auto loan you can't afford.

Once you realize you can't make your auto loan payments, call your lender. As the Consumer Financial Protection Bureau explains, it's generally more expensive for a lender to repossess your car than to come up with a different solution to help you out. Because of that, your lender might offer you the following options:

• Adjust the payment date. Sometimes, simply changing the payment due date helps make the loan more affordable. For example, if all of your bills are due at the end of the month and you're paid biweekly, moving some payments to the middle of the month can provide relief and make for easier budgeting.
• Get a payment extension. A payment extension lets you defer a payment until a later date. This can be helpful when you're experiencing short-term financial issues — for instance, an unexpected large expense your savings can't cover.
• Modify your auto loan. If your financial situation has changed permanently, some lenders might agree to loan modification. This may involve changes to your loan term or interest rate to make monthly payments more manageable.

The availability of these solutions, as well as eligibility requirements, vary by lender. Still, the sooner you get in touch, the more options your lender may be able to offer you.

When you refinance a car loan, you replace your existing loan with a new one. This can help if it results in a lower monthly payment due to a lower interest rate or a longer repayment term. Extending your loan term usually means paying more in total interest over the life of the loan, but that's better than falling behind on your payments (which could ultimately lead to repossession).

Some car lenders will allow you to refinance your existing loan, while others won't. Either way, you want to get offers from several lenders to compare their terms. Lending platforms that connect you with multiple lenders can be helpful here. MyAutoLoan, for example, can get you up to four offers, making it easy to compare. You can check your estimated interest rates without a hard credit check before you apply.

Autopay is our top pick for refinancing a car loan, thanks to its selection of car refinancing products. Besides traditional refinancing, the lender advertises cash-back refinancing, which allows you to borrow extra money from your car equity (how much of the loan balance you've already paid off). You can use these funds to pay off high-interest debt or other urgent expenses. Autopay also provides lease buyouts, allowing you to pay off your car lease early and keep the vehicle.

If modifying or refinancing your loan would still leave you with car payments you can't afford, selling the car can make financial sense (assuming you can get around without it).

Before you decide to sell, you need to know your car's current value. If it's worth less than what you still owe, you're dealing with an upside-down loan. In this scenario, the proceeds from the sale won't be enough to pay off the loan — and you'll have to pay the lender the difference, J.D. Power explains.

Settling a debt means your lender agrees to accept less money than you originally promised. According to Experian, it's better for your credit than a default — but it's still a negative item on your credit report since you didn't pay the full amount you borrowed. A settled account will stay on your credit report for up to seven years from the date of settlement.

An auto loan is secured by your vehicle — that means if you can't pay, your lender can repossess your car. However, if the lender decides the repossession process isn't worth the effort, they might agree to a settlement if you make your case. Unfortunately, there's no way to count on that happening.

If your lender refuses to negotiate and settle, you might have to voluntarily surrender your car. When that happens the lender will sell the car to recover the money you owe. If the car sells for less than the amount owed, you'll be responsible for paying the difference.

Again, voluntary surrender is probably less damaging to your credit than repossession, Experian notes. Still, it's a negative item on your credit record and can significantly lower your score.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every auto loan guide is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of car loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.