Every year hundreds of people apply for debt settlement loans but not all applications are accepted. Here is a sneak peek into the reasons behind it.
People go for the debt consolidation loan when they feel a need to combine their debt payments in monthly instalments and lower their interest rates. This can be a very beneficial thing for a lot of people. On the other hand, not everyone may qualify to get a debt consolidation loan or debt settlement loan.
Why debt settlement loans have been declined to you?
Top 5 reasons why debt settlement loans may reject your loan application:
1. Do you have something to offer as collateral?
When you take a debt settlement loan, it is very obvious that the debt negotiation services are offering you the debt assistance would like that you keep something as collateral with them. In such cases, people go for insecure financial loans, but they’re also a lot of money goes in interest. So, if you do not have anything to keep as collateral then you will be rejected for the debt settlement loan or debt negotiation.
2. Credit score and credit report:
There are a lot of things that are estimated while providing a loan and credit score is considered an important thing in providing loans. The problem in credit score and credit report might lead to denial for the loan. Late debt payments or debt collection might lower for credit score. So, make sure to have a full understanding of credit score before applying for the loan.
3. Is your income enough to pay back the loan?
It is very important to understand that thou you might benefit from the credit consolidation and debt settlement loan; it could be rejected if you do not have the minimum income to pay them off every month. Also, while you are in the settlement period, that is for generally three to five years you cannot use your credit cards, therefore you should have enough income that you can work without credit cards in a particular period. If the loan giving company does not find the income enough, they would reject your loan application.
4. Credit history is also an important factor:
You need to understand that the loan providing enterprise would like to have your credit card history or credit history to look at the way you use it in such a case not having a credit history may even harm your chances of getting the loan.
5. More than one debt:
Generally, all the banks and debt management services in Alberta do not provide loans for above 40% of the gross income. In such a case if you have any previous loan on the paper and together with the new loan it exceeds 40% then you will not be given loan or you will have to settle for a smaller loan.
With Credit720’s amazing specialists in Calgary, Lloydminster and Edmonton, you will never have to worry about debt settlement loans for good! They will share all the requirements beforehand forgetting a debt settlement loan without any hassle.