Debt Consolidation Loan
Question: My bank turned me down for a debt consolidation loan. I don’t understand why. I am currently paying $1,000 per month on my three credit cards-the payment on the debt consolidation loan would only be $800 per month, so if I can afford what I am paying now, why would they not give me the loan?
Answer: Banks lend money based on a number of factors, including your gross debt service ratio, which is their calculation of your ability to pay. It would appear that they have decided that, despite the fact that you are managing to pay $1,000 per month on your debts, they believe that you cannot afford even $800 per month.
Your options would be to try another bank (although the answer will probably be the same), or perhaps consider another option such as a consumer proposal.