Things To Do When You Are Declined For Debt Consolidation Loan
Have you ever been denied for debt consolidation loan? If yes, then you might feel frustrated and trapped. Well, not to worry as you might have some options in store for you. When you first heard about the term debt consolidation loans, they might have sounded like answers to your prayers. A streamlined and simple way to just make debt payments manageable easily is this consolidation method. Moreover, you are going to pay less to creditors and then achieve financial stability, which sounds quite great. But, that’s not the case for all. There are some people, who might not get debt consolidation help. Being declined for consolidation loan is no doubt a disheartening experience. There are some points, which might help you to deal with debt when you got rejected.
Figure out the reason behind declination:
The lenders of debt consolidations don’t just decline loans without any reason. On the other hand, there have been plenty of incentives to give out as most of the loans they have are for the qualified borrowers. This is how they end up making money. So, if any lender declined loan application, it might be for a good reason.
Understanding that reason won’t just offer you with closure but can help you to understand own situation so that you will know how to improve it before just seeking another consolidation option. There are few reasons behind not getting the debt consolidation loan. You will come to learn that from nationaldebtrelief.com.Let’s get to know more about that.
- You are denied because of low income:
The lender cannot just take your words when you say that you can afford taking on loan. It has to be sure that you can actually make the payments. The main way is should be done is by looking at present income level, while in relation to expected loan payments. If the lender does not think that you can keep up with loan, then your chances are little. You might ask for smaller loan but that may not help.
- Too much of debt over your head:
Other than the current income level, lenders might also look at the amount of debt you have currently under your name before you can address personal loan. If you think you have way too much of debt on your shoulder, they are likely to add some more to the list. If the lender is not already aware that you plan to use personal loan to pay debt, then you might mention it. It helps in creating a difference. You can even look for a lender specializing in debt consolidation as it makes the practice more understanding in terms of size of debt.
- If the score is too low:
Credit score will definitely indicate worthiness. Are you actually safe to lend? Can you easily be trusted for keeping up with payments? In case the credit score is quite low, chances of approval is going to be low, but it is not always possible. But, there are not many short term solutions available for low credit score. You might be able to push lender to offer loan, but it might be the high interest loan. It might cost you more money in end and can defeat purpose of getting debt consolidation loan in first place.
Create a budget and live with debt in the best manner possible:
If you cannot get your hands on the debt consolidation right now, then you must know how to live without it for a certain time being. If you have not already, try making a budget to get complete control on finances. For that, you have to open a spreadsheet and list out some of the sources of monthly income. You have to make some of the educate guesses on where it is necessary. After that, you have to deduct fixed expenses and some of the variable expenses like gas, groceries and utilities.
- The money left can be the amount to be flexible with. You have few options on how you are going to use it. Responsibly, you can either save that up as much as you can or just give yourself bigger so that you do not have to rely much on credit anymore.
- If you want, you can further relocate money towards paying the debt off. By paying strategically and more than minimum monthly debt payments, you can always get out of the debt at quite a faster rate while just paying less interest with time.
- There are mainly two basic approaches to it. One is debt snowball. With this method, you have to identify the dent first with lowest total balance. While making up the minimum monthly payments, you can pay surplus income towards debt, paying over and above. This strategy helps you to eliminate on of debts quickly and just freeing up more of income to pay off next lowest debt.
- The second approach in this regard got to be debt avalanche. Similar to snowball, you have to choose a focused debt. With avalanche, you can identify debt with highest rate of interest and just focus on eliminating it. This step might take longer time for eliminating debt, but this avalanche should help you save some money over time. It eliminates the highest interest sources first.
Have a chat with credit counselor for help:
Let’s just assume that your credit score is low and you have high debt leading you towards debt consolidation loan. If you are still quite curious of the debt consolidation options, you have to figure out how you get to handle things. Sometimes, the easiest way to do that is by getting hold of some professional help. These credit counselors are just professionals, whose job is to help people who are otherwise struggling with credit, figuring out the next steps to take. Many would like to work for the non-profit organizations and offer some free credit counseling services for the qualified individuals. So, if you need their advices, just log online and get to the result over here for sure.