If I have a Repossession in my past, can I still use Debt Consolidation?
A lot of people from very different financial backgrounds are interested in paying off their debts with debt consolidation, but many of them wonder if mistakes in their past will keep them from qualifying for a loan. One of the most common mistakes is car repossession. Having a car taken away by a bank does more than just take away your transportation. It can also destroy your credit rating and make it next to impossible for you to get another car loan.
How Debt Consolidation Helps
Debt consolidation loans are different from other types of loans, however. In order to qualify for a debt consolidation loan, a person has to work with a debt counselor. This financial professional works with you to form a budget and find a loan that will actually hep you get rid of your debt once and for all. The loan can include just about any debt that you have, including student loans, credit cards, and the “leftover” debt from the repossession.
The main reason that people don’t use debt consolidation after a car repossession, however, is that they mistakenly believe that they won’t qualify because of their low credit score. While it can be difficult to get a credit card or another car loan after going through a repossession, debt consolidation loans are different. Because banks know that candidates for these loans have been through credit counseling, they are much more willing to take a risk on this type of lending.
The credit counselor will work with you to develop a budget that includes your new loan payment as well as your other bills such as rent and utilities. In many cases, this counseling can help you to get your finances back in order and work through the issues that caused the repossession in the first place. Even if you’re out of work or living on a reduced salary, it’s still possible to qualify for a debt consolidation loan and pay off your debts.
If you have a car repossession in your past, don’t let it deter you from taking steps to fix your personal finances. Just because you have made mistakes or had a rough couple of months or years, you can still fix your problems and work towards your goals.