If you can get approved, a debt consolidation loan is one of the best ways to get your debt under control. When people are denied for a debt consolidation loan, it’s often because:
- Their debt is too high and unmanageable
- Their income is too low
- Their credit isn’t good enough
If you don’t qualify for a debt consolidation loan, you have other options, including a debt management program. If you think you might qualify, you will want to give yourself the best chance you can of getting approved.
Get Expert Advice
It’s often helpful to talk through your situation with a professional before you apply for a loan. If you’re a member of Valley Credit Union, we can work with you to determine:
- If your current situation makes you a good candidate for a loan
- If there’s anything you can do to improve your qualifications before applying
- If a debt consolidation loan is truly your best option
Boost Your Credit Before You Apply
There are a few things you can do to polish up your credit while you’re getting ready to apply.
If you can, pay off some of your debt (especially credit card debt) before submitting your application. You should also avoid opening up any new lines of credit in the few months before you apply.
Next, check on your credit history. You can request a free credit report once per year by going to www.annualcreditreport.com or by calling 1-877-322-8228. If you see any errors on your credit report, you can actually improve your credit by disputing them and getting them removed.
Know How Much You Owe
You don’t want to borrow way more than you need. If you know how much debt you have, you will be able to take out a debt consolidation loan for the appropriate amount.
You might want to set up a spreadsheet where you can list and add up all your debts, especially unsecured debt, which includes credit card debt, medical bills, utility bills, personal loans, and other debt that is not backed by an asset like a car or home. Most types of unsecured debt can be consolidated.
Show that You Have a Plan to Avoid Incurring More Debt
Many lenders are wary of giving loans to people who already have a lot of debt, but they may be more likely to approve you if they can see that you have a clear and feasible plan for paying off your debt. Plus, having a plan isn’t just important for getting approved, it’s also the best way to make sure you stay on track, rather than ending up with even more debt.
Try using our debt consolidation calculator to start making your plan.
Want to Know if You Qualify for a Debt Consolidation Loan?
There are many methods for consolidating debt. At Valley Credit Union, we work with our members to understand their debt and talk about their options. We can help you figure out the best option for you -- whether it’s a debt consolidation loan or something else. Contact us today to learn more and to talk with one of our experienced Member Service Counselors.