What to Do If Your Consolidation Loan Application Is Denied
While getting a rejection on your consolidated loan could seem like the end of your application journey, other solutions can help with your temporary denial. This could mean improving your budgeting and spending habits, allowing you to stand a better chance on your next application. Apart from these, other options to consider include:
Get a Co-Signer
If your finances are not adequate to help you qualify for a consolidated loan, consider getting a co-signer. Symple Lending professionals recommend partnering with someone who fits in with the required loan requirements to increase your chances of getting the loan. Consider elements such as their credit score, collateral availability, and credit history. Since a co-signer will be responsible for the loan if you default, make it a point to choose a party you are on good terms with, with such partnerships often leading to the loss of friendships.
Take Up More Income-Generating Opportunities
One of the reasons that numerous consolidation loan applications get denials is because of low income. Getting a side hustle or another job may help you increase your income level, allowing your lender to consider your next application. Keep in mind that this extra income should be used to offset your debt, helping you keep your debt-to-income ratio on the lower end. Keep track of your extra income, with records going a long way to improving your income report statements. Ensure you also pay at least the minimum monthly amount to fast-track your credit score.
Live Below Your Means
One of the reasons for a loan denial is when borrowers incur too much debt. This is often caused by overspending, with personal purchases being the most likely culprit. Consolidating your loans will not solve this, with budgeting being the remedy for such a problem. Start by working with a priority list for essential purchases, with leisure purchases kept to a minimum. This will be the trick to helping you get loan approval for your next application, allowing you also to have a positive credit history.
Some solutions that can help with this include splitting your bills by sharing your living space with your roommate, minimizing your takeaways, and keeping entertainment costs to a minimum.
Consider Debt Management Plans
Debt management plans can substitute a loan consolidation with this alternative, allowing you to pool your credit card debts into one. This utilizes one payment plan, making it easy to keep track of your monthly payment plans. It also provides an affordable interest rate, keeping your costs down. This will help you take charge of your finances before taking out a debt consolidation plan.
Seek Advice From Credit Experts
If you need a detailed plan and one-on-one advice on what could have led to a loan rejection, seek an expert’s help. Credit experts at Symple Lending maintain confidentiality for their consultations, keeping your information safe during and after your interactions. List your concerns and any steps you have taken to improve your finances.
Getting counseling will allow your credit expert to break down possible reasons for your denial request while providing a detailed plan for moving forward.
A denial of your loan signifies that you present a significant risk to lenders, requiring some overhaul of your spending habits. Consider minimizing expenses, getting an additional income source, and utilizing debt management plans. A loan expert will also be a great tool to help you identify gaps in your finances, with the help of a co-signer also coming in handy when you need to reapply for your next loan consolidation.