Debt Consolidation Loan Denied – Now What?

Question: I can’t find anyone who can offer me a unsecured debt consolidation loan. Banks have said NO …. Wells Fargo said NO … Citifinancial said NO. Where do I go now ?

Answer: With the credit crisis it has become increasingly difficult to qualify for a debt consolidation loan.  If everyone is saying no, you have the following choices:

First, you could simply not get a consolidation loan.  Cut your expenses and pay down your debt on your own.  In today’s world that is often the best solution.

Second, you could pay your debts on your own, and then try again in six months.  It may be that six months from now your debts are a bit lower, and your credit score may be a bit higher because you have lived at the same place, and been at the same job, for six more months, so you may qualify.

Third, instead of a debt consolidation loan you could try a debt management plan, which is like a debt consolidation loan, but there is no interest.  A not for profit credit counsellor can negotiate a repayment plan where you pay the debts in full, but at a reduced interest rate.

If you can’t afford to repay your debts in full, the next option is a consumer proposal, where a licensed proposal administrator works out a plan where you repay a portion of your debts.

If all else fails, the final option is personal bankruptcy.

The point here is that just because the bank says no, you don’t have to give up.  There are other options.  To find out more, check out our free Debt Options Calculator to see the cost of the different options.

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