What To Do if Your Debt Consolidation Application Is Declined

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Debt consolidation can help us out of an unpleasant financial situation. Even so, we rely too much on these types of financial services to get back on our feet and rarely do we learn our lesson.

But what happens if your request for debt consolidation is denied?

It can be a nightmare for your finances and can slowly turn into a storm of debts. Is there a solution when such a request is denied? Let’s find out:

What Do You Plan to Achieve?

Debt consolidation is used to gather all debts into a single one with one interest rate and a one-time payment per month. It can make a difference in the long run, and you won’t have to pay a huge interest rate. So, this service is something to look for if you are having troubles paying your debt.

What You Should Do If Your Debt Consolidation Application Is Declined

The first thing you should do is not panic. You can still do a lot more to save your money. Ask your lender why your request was denied. Was it because of bad credit? Was it because you have too many defaults? When you get that information, try to change some elements from your credit file.

For example, if you have bad credit, start paying your debts. If that isn’t enough, go to a credit repair service. Maybe the request for debt consolidation was refused because the lender saw your income and thought that you are a risk for him. Talk to him, bring evidence and convince him that this is not the case.


Other Options

You can apply for a loan to help you out with an emergency or pay some debts. You can also request a home loan repayment arrangement if you are in financial difficulty.

Saved by a friend – guarantors

A guarantor can help your situation. Thanks to him/her, you can increase your borrowing power. Your request for a loan can get accepted if you find a guarantor with a clean credit history. While it may seem tempting to get a big loan, now that you have a guarantor helping you, it’s best to borrow within a certain limit.

Failing to do so can result in other future debts, and next time there will be no guarantor to help you. And you will also get him/her into trouble too. So please, analyse your spending habits, your income and how much you can borrow.

Talk to a credit counsellor

I know you are short of money. But do not worry, since there are plenty of places where you can find free counselling sessions. And in situations like this, the advice is always welcomed.

During a counselling meeting, you will explain to the expert the situation you are in and what you are looking to achieve. Feel free to ask him or her all the questions that come to your mind and also, offer all the information needed to assess your financial problems. Some details might be more important than you think.

The credit counsellor will offer you some advice and options according to your financial situation, and all you have to do is choose the one that suits your needs and possibilities better.


Live on a budget

A simpler solution that does not involve making other debts is educating yourself to live on a budget; at least until you get rid of some of your debts and become trustworthy again in the eyes of the banks. Make a plan for your expenses and set limits. It is essential that you stick to that plan, or all your work would have been in vain.

Take advantage of your assets

Another method you can use is taking advantage of your assets. Depending on your debt and the assets you own, you can find this option very flexible. For example, selling your car can help you control some of your debts, and you’ll have a chance to apply for a loan.

If your debts are more serious, you may have to sell your house. You will cover all your debts and still have some money left so you can start over. But this is entirely up to you and your situation. If selling does not appeal to you, you could get another mortgage in case you already have one.

Final Thoughts

So, whenever your application for debt consolidation gets declined, you will be prepared if you keep these tips in mind. For more information, you may contact us for a free consultation and advice. We may be able to offer you that debt consolidation service that you need so much, or at least some tips on how to fix this problem. Check out our offers, stay positive and your problems will get fixed in no time. Call us now on 1300 138 188.

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