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Debt relief: What to do if a loan application is rejected

Louisiana consumers who are going through tough financial times may try various options to regain financial stability. Applying for a personal loan is likely one of the first remedies sought to obtain debt relief. However, many loan applications are not successful, and those already anxious about their financial situations may stress even more, not knowing how to resolve the problem.

The Fair Credit Reporting Act requires lenders to inform rejected loan applicants of the reasons for denial. These can include a damaged credit score because of late debt payments, or inadequate income to manage the monthly installments of the loan. It may help a consumer to check his or her credit report for errors. The Federal Trade Commission says 25 percent of all consumers find their credit reports contain errors.

A damaged credit score can be repaired. That should help with obtaining a loan and also be beneficial in other financial transactions. Improving a credit score takes time, and reducing other debt obligations such as credit cards may be necessary. If the loan denial was based on insufficient income, it might help to find a second job to augment the income.

Consumers who find it challenging to reorganize their financial lives may find comfort knowing that an experienced Louisiana bankruptcy attorney can explain available options for debt relief. While bankruptcy may be the most appropriate solution for many people, other options can be considered. Once the consumer is fully informed, a skilled attorney can provide the necessary guidance and support throughout the proceedings that will follow.

Source: mybanktracker.com, "5 Steps to Take if You Have a Loan Denied", Debbie Dragon, Accessed on Feb. 6, 2017

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