Common Reasons Why Your Bank Refuses Your Debt Consolidation Request

Author : Debt Free | Published On : 02 Mar 2021

When you have debts scattered all over different banks, they could be stressful to keep track of. There is no system, making it that much harder to pay them off. To make these debts easier to track, you can consider getting Debt Consolidation in Kelowna.

A licensed insolvency trustee such as Mike Wright & Associates Inc can help you apply for debt consolidation in Kelowna. With this method, all your debts will be shouldered by a bank and you will be granted another loan. You pay off that debt from one bank only.

This method not only makes it easier to keep track of your debts, but it can also give you an opportunity to find lower interest rates, thereby giving you a chance to pay off your debts faster.

However, not all applications for debt consolidation in Kelowna will be approved. Here are some of the reasons why this might not be approved:

1. Your debt-to-income ratio is not good.

If you have a higher debt compared to your income sources, your bank might not approve you for a loan. You need to make sure that you provide documents that will detail your income sources. Your bank needs to make sure that you are not a high risk. Otherwise, you will not be applied.

You can use a debt ratio calculator. You shouldn’t go over the 40% mark or your bank will not grant you a loan.

2. You are having trouble paying off your bills.

Banks can also see if you are paying your bills on time. If you have trouble paying off your bills, they might see you as a high risk. This also includes credit card payments. Delays in paying off your credit card can result in a lower credit ratio.

3. You don’t have a guarantee.

Banks want to be assured that they will not lose the money they will lend you. After all, debt consolidation in Kelowna is still another form of a loan. You can provide a guarantor. In case you don’t pay your loan, the bank will have the guarantor as a back-up.

4. You have no job or you have unstable income sources.

The bank will ask you to submit your income documents. If the income documents prove that there is no stable source or money comes erratically, you could become rejected.

The best thing that you can do right now is to consult your licensed insolvency trustee. You can explore your different options and if debt consolidation is truly the best way to go, your LIT will help you out.

It’s good to weigh down the pros and cons of this option so you can determine if it’s the best for you. If not, there are other options you can explore.

Shane Taylor is the author of this article. To know more about Bankruptcy in Kelowna please visit our website: debtfreebc.ca