A debt consolidation loan combines all of a person’s debt payments into a single, reasonable monthly payment while lowering interest rates. The primary goal of obtaining a debt consolidation loan in Vancouver is to make it simpler to regulate your debt and enable you to repay your debts on time. This post will go through the top five reasons a banking institution would turn down a debt consolidation loan application and how you can avoid it.
1. Control on Excessive Debt
You can only receive approximately up to 40% of your gross annual income for such a debt consolidation loan from a banking institution. Hence, if you apply for a loan, you would add your intended loan to your current debt payments. All payments on your existing loans, credit cards, lines of credit, and mortgages are included. To overcome this issue, you should have control of your excessive debt.
2. Obtain a Co-Signer for Your Debt Consolidation Loan
If you are not eligible for a consolidated debt loan, you may co-sign the loan with a close friend or family member who would do. Depending on the financial stability of your co-signer, the lender could then authorize you for such loan.
3. Credit report and score Must not be Poor
Your credit score and report are dangerous indications. They show a lender whether you’re trusted to pay your payments on schedule or not. Although your credit score isn’t the only consideration for lenders, you can be turned down for a consolidation loan if you have a low credit score and a poor paying record. That’s why it’s so important to make your bills timely.
4. Income Should not be Low
Creditors often consider the debt-to-income ratio, which compares the expected amount of your loan payment to your earnings. If your debt-to-income ratio for regular monthly spending is greater than 36%, creditors might question if you generate sufficient earnings to fulfill the loan installments.
5. Security is Must
Financial institutions may frequently need security while seeking a debt consolidation loan, particularly when you’re experiencing troubles keeping up with all of your expenditures. The financial institution can be reassured that they would return their money if security or collateral is given. So, you need to provide security or collateral while applying for a Debt Consolidation Loan in Vancouver.
If you’re still unsure about your next steps after being turned down for a debt consolidation loan and seeking debt management services, don’t hesitate to get in touch with the debt consolidation loan Vancouver. If you’re seeking debt consolidation in Vancouver, Debt Consolidation BC is the finest option. Their testimonials speak for themselves; they have assisted a majority of folks in getting out of debt fluently.