You don’t say what your financial situation is right now, other than being “upside down” on this car loan. I assume you have already had a professional mechanic look at the car and determine the extent of any engine damage, and you were told this is unrepairable?
If you have the financial resources to pay off the loan and junk the car, that’s probably your best option. Assuming it was properly maintained, and the engine barely lasted for 100,000 miles, that does not bode well for future longevity. I’m not sure it makes sense to pay $2500 or more to install a junkyard engine (which may not last much longer than yours did) or $5000 or more to install a remanufactured engine, especially since the car could be destroyed in an accident, or something else that’s expensive could fail.
If you don’t have the financial resources to pay off the loan, it makes even more sense to cut your losses on this car, and buy an old, cheap used car to drive until your finances improve. The $2500 or so, which you’d pay to have a junkyard engine of unknown longevity installed could be used to buy a decent used car from a private seller.
I’d look at something like a 1997-2001 Toyota Camry, 1993-1997 or 2003-2004 Toyota Corolla, late 1990s-early 2000s Ford Escort, maybe a late 1990s-early 2000s Chevrolet Cavalier/Pontiac Sunfire. These are all reasonably reliable models with reasonably low maintenance costs, and the models which use a rubber timing belt are non-interference, so no engine damage if the previous owner lies that the belt was changed, and you discover it wasn’t when it fails.
Edit: After seeing additional information above that the damage consists of bent valve(s) and maybe a nicked piston or two, it should be possible to have your engine repaired, and hopefully the car will run long enough to pay off the loan.