Have you been reused a debt consolidation loan by your bank?
- Are you unsure as to why you do not qualify for or are unable to get a debt consolidation loan?
- Would you benefit from an alternative type of personal debt consolidation solution?
Currently, people are struggling to get unsecured debt consolidation loans from lenders such as the high street banks.
This can be for several different reasons and people are usually refused debt consolidation loans by the main banks due to not having enough disposable income to repay the new proposed debt consolidation loan.
However, in many cases, we are seeing more and more situations where a high street bank has refused an individual for credit and the individual seems to have the ability to repay the loan that they have applied for.
- Have the banks actually got the money to lend?
- Is the risk just too high for these banks to take the chance that the customer will repay?
- How will the banks make up for the revenue they are losing by not lending?
The above questions lead to banks looking for further security from the borrower when lending. If the person borrowing is a home owner, the bank would then try to secure the loan against the customers home as that would provide far more security for the bank should the customer default and be unable to repay the debt. If the customer has little or no equity in their home then the bank is not in a position to take the home into account as security for the loan.
You should always be careful when using your home as security for a new loan. You could be in danger of losing your home through repossession if you fail to keep up repayments on a loan or any other debt secured against your property.
The following are some other reasons for people being refused debt consolidation loans by high street banks;
- Defaults on the consumers credit file.
- Missed or late payments on credit accounts including credit card debts and loans.
- Not enough disposable income to repay the new loan should you have time off work due to sickness or a general reduction in income.
Some people who have never borrowed before cannot understand why they are being refused a loan or credit for other purposes than that of debt consolidation, this is usually because the new lender has no ability to judge the borrowers repayment history as they have no previous borrowings, this problem of having no credit history can be as bad as having a poor credit history when searching for loans or credit cards.
Credit Expert is a service available that allows you to check your credit file and take a glimpse at what lenders would potentially see when deciding if to lend you money. It is run by Experian, a very useful and well respected credit reference agency in the UK.
Other personal debt consolidation solutions are available for people to clear debts if they have been refused a debt consolidation loan; these solutions include but are not limited to the following;
- Debt Management Plans
- Iva or Individual Voluntary Arrangements
- Bankruptcy
- Debt Relief Orders
- Debt Consolidation Scotland
If you have been refused a personal debt consolidation loan and need help or advice to clear your personal debts, please call our personal debt helpline today in confidence using;
- 0800 018 6868
- Lines are open 24 hours / 7 days
- Calls are usually FREE from a UK landline
- Calls from mobiles may be less expensive if you dial 0161 872 3383
