What Can People Do If Their Debt Consolidation Loan is Denied?

By | December 26, 2018

For many reasons, a financial institution may deny a person debt consolidation. Do not panic; other solutions are available. A partial consumer consolidation is a practical option and so is bankruptcy.

Partial consolidation

With a partial consolidation, a borrower can:

  • Make a single monthly payment without any interest.
  • Have the number of their debts negotiated by a trustee, and therefore reduce the total amount of those debts according to his or her ability to pay.

Many people choose a partial consolidation after being approved for a debt consolidation loan. Indeed, debt consolidation can increase the level of indebtedness of people who fail to pay their monthly payment. They are then forced to turn to a partial consolidation or personal bankruptcy, depending on their financial health.

It is recommended that a borrower gets financial help from professionals who will help the client choose the right solutions. Sharing their situation and getting advice from professionals will save individuals a lot of aggravations in the short and long-term.

Banks are refusing to consolidate your debts, so what can be done?

If a bank refuses a person a consolidation loan, it’s probably because they do not have a good credit score or their income is insufficient. If so, there are still solutions to reduce the burden of those debts. Bankruptcy or consolidation – how to choose the right option?

Bankruptcy and consolidation – who are entitled to these options?

With bankruptcy, specific criteria must be met. For instance, any individual or business with more than $1,000 in debt and are unable to repay, may be eligible to declare bankruptcy. Although this is the last resort solution, it is one that is accessible no matter what the borrower’s situation is. However, most people would benefit more if they considered consolidation first.

Regarding consolidation, this option is mainly aimed at people who wish to meet their commitments without resorting to bankruptcy. Everything depends on the person’s situation and if they can get out of debt without having to declare bankruptcy. If all you need is a decrease in monthly payments and more time, debt consolidation could be the perfect solution. Go online here to learn more.

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