4 Reason You Application For Loan Consolidation Is Rejected
When anyone of us gets into financial trouble, the one thing that comes to our minds is taking out the loan. Consolidation of loan is the most preferred form of loan these days. It enables the person to pay off all the small debts by taking one larger loan. In this way, he has only one loan to manage and concerned about.
Consolidate debt s a very good and practical idea for most of the people. However, getting this type of loan is not aneasy task. Your application for consolidation of debt may be rejected for many reasons. Here are few common reasons that lead to thedeclined loan application.
You Have Low Credit Score
The credit score is one of the biggest problems which never let the people get approved for loan consolidation. When people are not able to pay the loan payments on time, the credit score goes down. It is very important for you to improve your credit score if you want to be trusted by the lender. There are many ways by which you can increase your credit score. Try anyone of them and after getting your credit score increased, apply for the loan consolidation.
You Want To Get Too Much Debt
Usually, the lending companies or banks consider your gross income and then grant you the loan. The total amount of money granted to you is usually 30 to 40 percent of total gross income. When you apply for the loan, the bank will add all your existing loans to the loan you have requested for. If it becomes more than 40%, your application for loan consolidation will be rejected.
YouDon’t Qualify For the Debt
There is a specific eligibility criterion to be able to apply for the loan consolidation. The bank can reject your application if your income is not sufficient enough to sustain the monthly payments that you will have to make to pay off the debt. You are required to have a specific amount of income as your minimum income in order to be able to get this loan. If you want to check your eligibility criteria, you can easily do it by checking if you can easily manage the monthly payments along with your current income.
You Don’t Have A Credit History
You may take not applying for loan ever in your life as a positive thing. However, it can go against because it shows no credit history of you. The lender may want to know how good you are at paying the money back. Because of not having a credit history, they may decline your loan consolidation request. For this, you should instantly apply for the credit card. Once you get your credit card, make a small purchase from it and then repay the money within the specific period of time. In this way, you will get a credit history.