You may not realize it, but your car is a valuable asset if you are trying to find affordable debt consolidation loans and options. Whether you are trying to refinance your car loan, or using your car equity as collateral, there are a few options you should explore to ease the burden of debt.

1. Refinancing Your Car Loan

This option becomes available to you one or two years after paying your monthly installments on time. Your credit score will be improved and you can negotiate a new loan, with more affordable terms. This means that you will pay less for the car loan each month. Read more here - http://www.toptenreviews.com/money/debt/best-debt-consolidation-companies/.

The money you save this way can be used for repaying your older debts so, in a sense, renegotiating the car loan works as a debt consolidation option for you. However, the renegotiation of the loan is an option for you if you bought a brand new or fairly new pre-owned car. Banks will not negotiate loans for older car models, which will lose their equity value before the loan period is over.

2. Using Your Fully Paid Car as Equity

If you have already paid your car in full, you can bring it as collateral to secure a debt consolidation loan on affordable terms. The traditional financing institutions, banks and credit union, are more willing to negotiate if they consider that their risk is covered by the collateral you are bringing.

It is important to remember that you do not have to be really deep in debt to look around for consolidation. The earlier you recognize the signs of trouble, the smaller the loan amount you will need to repay your debt will be. For smaller loan amounts and with a valuable collateral, your bank or credit union will be open to negotiate an affordable interest rate for a short term loan.

3. Consolidating Your Car Loan with Other Debt

You also have the option to merge all the money you owe to different lenders into one loan, but, if your car loan is one of them, the car itself cannot be used as collateral. However, if you have conscientiously repaid your car loan for some time, you probably have a fairly good credit standing, as stated above. 

Lenders will analyze your credit history for 4-5 years and will note the positive trend in your monthly payments. Therefore, they will be more inclined to grant the consolidation loan under good terms and conditions.

These are three simple ideas that you should consider when you try to secure debt consolidation loans – and they all involve your car and using its equity value to your advantage.