Debt consolidation can be a smart way to streamline multiple payments and better manage your personal debt, but getting approved for a consolidation loan with good borrowing terms can be much more difficult than many people anticipate.<\/p>\n\n\n\n
If you\u2019ve been turned down for a consolidation loan you may feel discouraged and as though you don\u2019t have any other options, but there\u2019s good news \u2013 what many Canadians don\u2019t know is that it is possible to consolidate your debt without borrowing<\/em>. Read on to learn about some common reasons individuals are denied consolidation financing, and what you can do instead.<\/p>\n\n\n\n Often people who want to consolidate their debt are looking to get a handle on a financial situation that may be getting stressful or overwhelming, and gain better control over growing balances and payments. There are usually several benefits people try to achieve in consolidating their debts, such as:<\/p>\n\n\n\n Debt consolidation with a lender means you\u2019re taking out a new loan, not just changing an existing debt, and this means you must meet the lender\u2019s qualifiers. Many consumers first turn to their bank or another lender when they want to consolidate their debt, and, as many discover, getting a consolidation loan can be a lot more difficult than they thought.<\/p>\n\n\n\n\n Even people with a longstanding relationship with their lender and a \u2018good\u2019 credit rating may be denied a consolidation loan, especially one with borrowing terms that allow them to get the full advantages they want. For example, a lender might be willing to offer you financing but:<\/p>\n\n\n\n Learn More About Learn Why Borrowing Isn\u2019t Always Best for Consolidating Debt<\/a><\/p>\n\n\n\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n \n\n\n\n\n There can be several reasons you might have an application for credit rejected by a lender, and while not all lenders will have the same checks and qualifiers in place, here are some of the common reasons why you might not be able to get a consolidation loan (or other financing):<\/p>\n\n\n\n Your credit score is an ever-changing number ranging from 300 (low) to 900 (high). To get a consolidation loan with good terms, borrowers generally want you to have a credit score in at least the mid-600\u2019s. Higher scores can qualify for you for \u2018best terms\u2019; less than this and you might only qualify for borrowing with a sub-prime lender, which typically comes at a higher cost.<\/p>\n\n\n\n\n The formulas that credit bureaus use to calculate your credit score aren\u2019t publicly available, but your payment history is one of the key factors that makes up your credit score.<\/p>\n\n\n\n Other factors that can negatively impact your credit score and cause you to be ineligible for borrowing include:<\/p>\n\n\n\n Bad Credit? Here\u2019s What You Can Do<\/a> <\/em><\/p>\n\n\n\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n \n\n\n\n\n A lender may deny you a consolidation loan if you don\u2019t have a significant asset such as home equity or a vehicle to pledge as collateral for the loan. Lenders will often ask to have an asset as security for borrowing so they have additional means to recover their money \u2013 if you stop paying they can seize and sell the asset.<\/p>\n\n\n\n Lenders may also ask you to bring in a co-signer to back up your loan. Much like using an asset as collateral, this gives your creditor other avenues to collect their debt, but carries significant financial risks to your co-signer, not to mention any relationship risks, if you have difficulty making your payments.<\/p>\n\n\n\n What You Should Know About Co-Signing Debts<\/a><\/p>\n\n\n\n Lenders want to be assured that you can afford to repay your loan within the amortization period and, from their perspective, the higher your payments are compared to your income, the riskier it becomes that you\u2019ll default on your loan. This can be particularly problematic if you have a lot of debt, have seasonal or part-time income, are self-employed, or lack employment history.<\/p>\n\n\n\n If your debts are high in comparison to your income lenders are likely to deny you a consolidation loan. Lenders may interpret a lot of debt as symptomatic of you having issues controlling spending or they may consider your debt-to-income ratio simply too unbalanced for you to be able to reliably repay a new loan.<\/p>\n\n\n\n How Much Debt is Too Much?<\/a><\/p>\n\n\n\n\n It can be incredibly disappointing and even embarrassing to be turned down for a consolidation loan, especially when you are already dealing with debts that may feel unmanageable or out of control \u2013 but remember, there are other ways to consolidate your debt \u2013 without borrowing!<\/p>\n\n\n\n Book your free consultation with one of our experts and start living a debt-free life.<\/p>\n \n BOOK YOUR FREE CONSULTATION <\/a>\n <\/div>\n <\/div>\n<\/div>\n\n\n\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n \n\n\n\n\n Fortunately, borrowing isn\u2019t the only way to consolidate your debt to get relief from accumulating interest and never-ending payments. In Canada consumers have a few options to consider that can serve to streamline multiple payments, ease interest charges and relieve pressure on your monthly budget.<\/p>\n\n\n\n A Consumer Proposal is a unique option in Canadian law<\/a> and is one of the best ways to consolidate \u2013 and cut \u2013 your debt, without borrowing, interest, or added fees. This is a legal debt consolidation solution you can access only through working with a Licensed Insolvency Trustee.<\/p>\n\n\n\n A Licensed Insolvency Trustee can talk with you about your situation and whether a Consumer Proposal is your best option<\/a>. <\/em>For many people a Consumer Proposal is the ideal solution, allowing you to repay what is affordable and giving you a clear debt-free date.<\/p>\n\n\n\n Book your free consultation with one of our experts and start living a debt-free life.<\/p>\n \n BOOK YOUR FREE CONSULTATION <\/a>\n <\/div>\n <\/div>\n<\/div>\n\n\n\n These informal debt repayment plans are coordinated by a credit counsellor who will try to negotiate an interest reduction or freeze with your eligible creditors, and you\u2019ll make your consolidated monthly payment to the credit counsellor.<\/p>\n\n\n\n Unqualified Debt Advisors \u2013 What Consumers Need to Know<\/a><\/p>\n\n\n\n\n If you\u2019re facing a more extreme situation such as where your income is very limited in comparison to your debt load and you can\u2019t afford to repay even a reduced portion of your debt, declaring personal bankruptcy<\/a> is a final option to consider.<\/p>\n\n\n\n It\u2019s important to understand that if you\u2019re considering a consolidation loan or have been turned down for one, your debts may have already reached a point where simply combining them into one new loan is not going to be a significant enough solution to allow you to get out of debt without considerable cost or time.<\/p>\n\n\n\n If you think you have a debt problem, are worried about managing your debts, or want to find a better way to pay off your debt within five years, the best thing to do is talk with a Licensed Insolvency Trustee to get qualified expert advice about your situation and all your options<\/a>.<\/em><\/p>\n\n\n\n Licensed Insolvency Trustees are Canada\u2019s only designated debt help professionals, and we are the only experts qualified to offer debt advice to consumers, including solutions that can help you get forgiveness for virtually all types of debts.<\/p>\n\n\n\n When you need guidance on dealing with debt, a Licensed Insolvency Trustee is your best resource<\/a>, and all Licensed Insolvency Trustees should offer you a free, confidential debt consultation. This is your opportunity to get specific advice about your unique situation and explore all your options, including debt consolidation financing, Consumer Proposals, credit counselling plans<\/a> and more.<\/p>\n\n\n\n You owe it to yourself to get debt help, and we\u2019re here to support you. No judgment, just solutions!<\/p>\n\n\n\n Talk with a non-judgmental debt help expert at Sands & Associates to get a debt-free plan that works for you, and move forward with your life.<\/strong><\/p>\n\n\n\nWhy Debt Consolidation is Helpful in Paying Off Debt<\/strong> <\/strong><\/h2>\n\n\n\n
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Reasons You Might be Denied a Consolidation Loan<\/strong> <\/strong><\/h2>\n\n\n\n
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\n GET A FINANCIAL<\/span>\n FRESH START <\/h2>\n
What Are the Alternatives to a Consolidation Loan?<\/strong><\/h2>\n\n\n\n
Consumer Proposals \u2013 Consolidate and Cut Debt (up to 80%)<\/strong><\/h3>\n\n\n\n
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\n GET A FINANCIAL<\/span>\n FRESH START <\/h2>\n
Credit Counselling \u2013 Repay 100% of Your Debt<\/strong><\/h3>\n\n\n\n
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Can I Afford a Consolidation Loan?<\/strong> <\/strong><\/h3>\n\n\n\n
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Get Help with Debt Consolidation \u2013 Talk with a Licensed Insolvency Trustee About <\/strong><\/h2>\n\n\n\n
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