Consolidate Your Automobile Debts for Enjoying a Debt-free Existence
For many people in the United States, automobile debts are supposed to be their biggest debt burden. It exerts heavy pressure that is threatening to become overwhelming as car loans would stretch long terms for buying increasingly exorbitant vehicles both used and new. If statistics are correct then Americans owed over $1.14 trillion in terms of auto debts as in September 2018. Remember debt consolidation is quite a common phenomenon in our society. As per https://money.howstuffworks.com, a vast majority of the consumers are actually paying off a host of other debts along with their car loan. Credit card bills, mortgage payments, boat payments, etc. And they have been taking advantage of debt consolidation for combining all these debts into one simple and easy monthly repayment.
Debt consolidation involves taking out a big loan and using it to effectively pay off all your debts at once. When you do it in the right way, you could end up saving a substantial amount of money every month. When you go wrong, you may end up paying much more as compared to before. Auto loan consolidation would help you in combining all your existing auto debts into one single loan with just one monthly repayment. Americans have two or more cars in practically every household, so they experience overpowering auto debts. Therefore, it makes sense to pursue automobile debt consolidation for getting out of debts and leading a stress-free life.
Why Opt for Auto Debt Consolidation
There are various reasons for opting for automotive debt consolidation. The main advantage of auto debt consolidation is convenience. By streamlining all your automobile debts, you are able to substantially reduce the number of bills coming to your mailbox. This helps in simplifying your monthly budget. Secondly, auto debt consolidation would facilitate just in the same manner as refinancing in lowering the overall interest rate. People who are grappling with numerous high-interest credit card debts would be opting for effective debt consolidation. You may get in touch with a reputable and trustworthy company such as NationaldebtRelief.com for taking complete charge of your debts. However, debt consolidation works wonders even in the case of outstanding auto debts.
You may consider opting for consolidating your auto debts provided your credit score is good, approx 750 or more and you are having no issues in paying off all your current debts. Remember taking out a debt consolidation loan could prove to be a serious commitment and a financial institution or bank would be granting you the loan only if you have the financial robustness to meet your monthly repayment on a regular basis.
However, automobile debt consolidation could come with some serious risks. If you are having just an ordinary car loan, in case you have defaulted in your monthly repayments, your lender could be repossessing your vehicle but fortunately, he would have no access to your house. In case of an auto debt consolidation, your creditor would be taking your car, house, boat, and everything incorporated into the consolidation scheme.
In the event, your finances seem to be slightly shaky, you must better watch out. Remember debt-ridden and stressed consumers easily are taken for a ride by unscrupulous debt consolidating agencies. Stay away from auto debt consolidation if the agency charges lump sum upfront fees.
Some Reasons Why a Debt Consolidation Loan Application for Your Auto Debts Could Be Declined
Your automotive debt consolidation loan approval primarily depends on how sound your personal financial status and information are. Debt consolidation loan requirements mainly comprise positive credit rating and personal income. Without an impressive or a robust credit score, auto debt consolidation loan with favorable terms would be almost impossible to get.
Poor Credit Score
Your poor credit score could be a reason why lenders may reject a debt consolidation loan application. A credit score of 620 or below is usually regarded as poor. Hence, any potential auto loan borrower having a poor credit rating should expect to have his loan request turned down. All financial institutions would be leaning heavily on your specific credit score while evaluating your actual creditworthiness. For lenders obviously, loaning money is precisely a meticulous assessment of risk. Lenders consider borrowers who have poor credit as a bad risk, hence, their debt consolidation loan applications are generally denied.
Whenever a creditor examines your credit report, your score would be impacted and it would go down by a couple of points or so. That is simply because credit agencies would be viewing constant checks present in your credit report as a clear indication that you are constantly looking for more debts. This would be regarded as you being reckless in your financial dealings and would certainly act as a red flag and your car loan request could be declined. However, lenders must keep this in mind and they must try to be more accommodative by performing other background checks before examining your credit score.
Issues Relating to Your Loan Documents
Your debt consolidation loan for combining your auto debts could be disapproved because of some issues relating to your documents. Your lender may deny your loan request if the loan application is incomplete or if certain important documents are missing. Lending companies would require examining a series of important and relevant documents prior to giving you a loan application approval. If any of the necessary items fail to be submitted along with the loan request application, your application may not be processed in such a situation. The most simple but effective fix is to comply with existing requirements. You would require attaching proof of income, a driver’s license, and POI or Proof of Income along with auto insurance info.
There could be some errors while filling in the debt consolidation loan application. Once the lender is satisfied that you have submitted all the necessary documents, your debt consolidation loan request would be approved. If you intentionally try to hide some information, the lending company would become suspicious and as a consequence, your loan application may be rejected on principle.
When we talk about a consolidation loan denial because of poor timing, we do not imply a particular hour or part of the day. It implies your application could be declined because of the existing circumstances, for instance, your employment status. You may be currently on a probation period at your new job and have applied for a debt consolidation loan. Your loan application may be denied as the lenders may find it risky to deal with you as your new job does not offer much in terms of financial security and stability. If you have just switched jobs, it is obvious that your probation period actually means trial period implying that there are no guarantees that you would be holding onto the job after a couple of years or so. You may look for a co-signer or alternatively, you could cut down your overall debt amount with consistent lump sum payments.
Employment History & Income
Your employment and your overall income could be the major factors that would be considered by the lenders. If your earnings are not adequate, or you have just commenced a new job or suppose you are having an unstable employment background, you would be regarded as a high risk to the lending company.
Moreover, a debt consolidation loan request for consolidating your automotive debts would be disapproved if you seem to be a habitual or compulsive job hopper. up to 3000 dollar loan approval loan approval.
It is now possible to integrate all your auto debts into one single integrated debt by using an effective debt consolidation loan. You must do some homework to ensure that debt consolidation is just the right choice for your situation before you consider making a decision. However, there could be several reasons for your debt consolidation loan request to be turned down by banks and other lenders. Moreover, there exist several shady dealers; however, often the root of all issues would be in your own circumstances, finances, or choices. If debt consolidation loan approval seems to be an issue, you must examine your present circumstance and financial condition. The problem actually may be quite easily solved.