Debt Consolidation Loans: What to Do When The Bank Says “No”

Debt Consolidation“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?”

Alternative Debt Solutions

Debt consolidation loans a great option for many people with money problems, but what can you do when the bank says no?  If you have bad credit, or too much debt, it is likely that the bank will reject your application for a debt consolidation loan.

With the credit crisis it has become increasingly difficult to qualify for a consolidation loan.  If you don’t qualify, you have the following options:

First, talk to the bank.  Find out why they rejected your application.  Even better, ask them what it would take to turn their “no” into a “yes”.  Perhaps you have not lived long enough at your current address, or you do not have enough time at your current job.  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 so you may qualify.  It’s also possible that with a co-signer you would be approved.

If the bank says no, it’s time to evaluate your other debt relief options.  Our debt options calculator can show you the cost of other alternatives for getting out of debt.

  • Instead of  debt consolidation 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. This is where a licensed proposal administrator works out a plan where you repay a portion of your debts. A consumer proposal is like a debt consolidation loan because you make one set payment each month to deal with your debts.  Unlike a loan, however, it may be possible to repay less than the full amount you owe, and there are no interest charges.  However, a consumer proposal does appear on your credit report, which may make it more difficult to borrow in the future, so you should talk to a consumer proposal administrator or a bankruptcy trustee to determine if a proposal is right for you.
  • 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. Contact us for a free online evaluation of your debts by an accredited debt professional.

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