Why was I refused a loan? | Loans Quebec

Image result for denied loanTo receive a refusal for any type of application is not very pleasant. The worst thing to do in this case is to feel sorry for yourself and make yourself the victim.

You should rather stay objective and think critically. Ask yourself what you did not do correctly and who led to the refusal. This article will introduce you to the way lenders analyze the applications they receive. So, when you next apply, you will have some advances.

 

 

Unclear credit reports

Discrepancies, inaccuracies, or any other ambiguous detail on your credit report are enough for the lender to refuse your application. Track your payments instead. If you observe that you have been awarded improper penalties for delayed payments, contact the credit company to prevent this from affecting your credit rating.

Faults in the application itself

You decrease your chances of approval each time you mistakenly enter information. The inaccuracies may relate to information about your credit, your job or even your home address. In addition, if you do not complete certain passages of the application, it also reduces your chances of approval. Before submitting the application, make sure to review it to avoid any errors or omissions. Although this is a trivial mistake, it can be expensive in the end.

Employment history

Image result for employment historyThe first thing the lender will pay attention to is your employment situation. This is normal: a stable job means a constant income. Involuntarily, lenders will have more confidence in applying with a job because they have the opportunity to pay off the debt. If you have an irregular employment history, your chances of approval will be decreased. The secret is to make the lender both confident and comfortable in your ability to pay on time.

 

Income versus Debt

Before you even look at your employment situation, lenders will first look at your income. If your income is disproportionate to your debt, it may refuse your application. It might be a good idea to consider our debt resolution options .

Check your debt ratio

<strong>Check your debt ratio</strong>

This ratio will give you a general idea of ​​how much your debt is in relation to your income. We suggest you take a look at it from time to time. In order to calculate your debt ratio, you only have to divide the amount of your monthly debts by your monthly income. If your ratio is greater than or equal to 43%, you will be perceived as a risky borrower by the creditor. This means that your debt is high compared to your current income. In fact, to keep an eye on this ratio, choose a site to calculate the debt ratio as your Internet home page. So, every time you go on the internet, you will remember to monitor your finances. This will save you all unnecessary expenses and keep you on track.

Bankruptcy

The length of time that bankruptcy will appear on your credit report will depend on the type of bankruptcy. You do not need to remember that bankruptcy does not necessarily convey the desired message to the lender. Bankruptcy makes lenders less confident and less comfortable lending you money because they do not think you will be able to pay off the debt. Of course, each creditor is different, but your chances of approval will definitely be affected, especially if you have declared bankruptcy recently.

Using the credit card

Image result for credit cardTry not to overuse the limit on your credit card If, each time, you exceed your limit on the card, your credit score will be negatively affected. If, in addition, you have several credit cards and you use them to the maximum, your chances of approval will be even lower. Keep track of your expenses and try not to use more than 30% of the amount available on your credit cards.

The following suggestions should help you get a loan more easily in the future. To obtain a refusal does not amount to a personal failure. Many creditors have their own criteria that will be unknown to us and beyond our control. Stay positive and make sure your finances are under control.

Do you want to get out of debt? Here are the gestures and habits to AVOID!

 

Successfully getting out of debt can sometimes seem like an insurmountable challenge. Before giving up, however, make sure that you are not committing any of these common mistakes.

Ignore the problem

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Your problems will still be there tomorrow morning if you do not address them today. You can make arrangements and hide from your creditors; you can send all the letters you want, your debt will always be there as long as it will not be paid.

You have to deal with your debt. You must assume your share of responsibility. Certainly, if a portion of your debt is fraudulent, or if there is a sum that has been added to your debt in error, follow the steps necessary to dispute it. However, if your debt is legitimate and fair, acknowledge that you owe it and create an action plan to settle the account. You will find it surprising how the simple recognition of your responsibilities can alleviate your worries!

Get a consolidation loan with a co-signer

If you are able to make your payments but find it difficult to reduce your balances due to too high interest rates, it’s time to think about a consolidation loan. A lower interest rate will allow you to pay more than just the interest and the minimum due; you will reduce your balances and you will begin to see the end of your debt on the horizon.

If you do not qualify for a consolidation loan on your own, or if you find it difficult to pay even the minimum on your existing loans, it is likely that a consolidation would be too risky – especially for a potential co-signer: if you do not fail to make your payments when they are due, or if you fail to meet the minimum payment, your co-signer’s credit rating will be affected as well as yours, which will affect not only your ability to to borrow, but also to your relationship with your co-signer.

Account closure overdue

Image result for account closure overdueThe outstanding credit account closure will certainly prevent you from making use of it and increase the balances you have to pay, but you will still have the same accumulation of interest and you will still have the same payment obligation. A closed account always accumulates interest charges and always affects your credit rating – especially if you do not make your payments. In addition, the proportion of your credit used versus your available credit is taken into account when evaluating your credit rating, so closing accounts or there is still a credit available do you no service.

But if you do not close your outstanding accounts, it is important not to contribute to the increase of their balances. If you try to pay your creditors, you will not see any progress as long as you keep adding to what you owe. All in all: destroy your cards to remove the temptation to use them, but keep the accounts open to protect your credit.

To think that a credit counselor is absolutely necessary

 <b>To think that a credit counselor is absolutely necessary</b>

Do not hesitate to formulate your own action plan. Do you have only a few overdue accounts? So call your banks and financial institutions and ask if there is an opportunity to make a payment agreement or if there is an opportunity to lower your interest rates. Most lenders will be happy to find a way to help you if you are sincerely seeking to pay what you owe.

Despite this option, you may decide to use the services of a credit counseling agency. In the past, this remedy would have hurt your credit rating, but things have changed. The new regulations simply state that you are using the services of an agency. That being said, be aware that agencies will often charge you a monthly service fee and that the plan they develop may take several years to complete. It is therefore important to undertake this path with caution.

Thinking it’s easy to declare bankruptcy

 <b>Thinking it&#39;s easy to declare bankruptcy</b>

Bankruptcy is not easy. Far from it, the path to credit rehabilitation following a bankruptcy is long, complicated and you will have to discuss every detail of your financial life in bankruptcy court. Bankruptcy does not protect you, either, from your mortgage payments, student loans, or any expenses associated with the bankruptcy filing itself. Plus, your credit rating will carry the black mark of your bankruptcy for years.

If you still believe that bankruptcy is a possibility for you, consult a bankruptcy professional immediately. Your financial situation will only get worse if you delay seeking the necessary advice. That being said, it is not an obligation to meet with a bankruptcy lawyer before starting the process, but this consultation will allow you to know what avenues are available to you and to see if the bankruptcy is reasonable in your situation.

Pay your debts with your retirement funds

The temptation to use your retirement fund – an account full of funds that belongs to you – when your creditors knock on the door can be hard to resist, but it is imperative to let it go! That you despair, that you believe you buy peace using these funds to rid your debt, you will despair even more during your retirement when your wool stocking will be empty and that there will be new accounts payable. Your retirement accounts are protected from your creditors, even if you are recovering, even if you pay your salary to pay what you owe. Respect the wisdom of this protection and do not touch it!

Paying your debts takes a sustained commitment and a little courage, but avoiding bad habits and harmful actions to your financial future will help you meet your goal. And when you start seeing real progress, you’ll find yourself more confident and ready to face your next challenge!

After the Yes I want it: to join your money

Image result for marriedBanking, budgets and bills may seem like the least romantic thing but perhaps the most important thing. A marriage does not join only two individuals and two families; it also involves joining two financial situations, two bank accounts and two sets of debts. With the wedding season in full swing, we want to say a few words on the subject after passing the Yes step, I want it.

Put romance on the back burner

With nearly 50% of marriages ending in divorce and a large percentage of Canadians saying that money is the main problem in their marriage. Managing your finances before the wedding is probably the best gift you can give yourself. It’s okay to put romance aside for a moment.

Each couple is different and your financial discussions will be different too. We think that a good rule of thumb is to discuss your finances before you start planning your wedding celebration. Weddings can cost a small fortune and no one wants to start a life together by adding even more debt and financial stress to their relationship.

How to start a conversation?

Openly discussing income, credit card debt and bank account balances can be stressful, intimidating and sometimes uncomfortable. Keep in mind, however, that you are joining two lives together and that you will have to discuss finances for the rest of your life. It’s better to be comfortable with the principle from the start. Here are some questions you should consider if you are having trouble starting a pre-wedding financial discussion.

  • How much debt do each of you have? Including credit card debt, personal loans and students.
  • Do you want to join your finances completely, share a joint account or keep everything separately?
  • Is buying a house important for both of you?
  • Can paying for a big wedding be possible in your current financial situation?
  • Is paying for a big wedding more important than buying a house in the immediate future?
  • Are children part of your plans and how will they affect your financial decisions?

Smart financial discussions and decisions should provide a stable foundation for your marriage.

Maintain a financially healthy relationship

Depending on your relationship and your finances, there are several options for dealing with money attached after saying yes I want it. Generally, here are 4 of the most important concerns you should address and where to find a plan when discussing your financial future together.

A place for your money

We assume that you both have at least a small amount of money in the form of chequing accounts, savings accounts and RRSPs, perhaps even TFSAs. It is totally correct to keep all of this separately. Many couples do the same. What you need to discuss is how you will pay for daily expenses:

  • Will you buy a house together, where will the mortgage payments come from?
  • Who will pay for the amenities?
  • Who will pay for food and other household items?
  • Do you both own a car? Or who will make the payments if you share?

A good way to manage all these daily and monthly expenses is to open a joint account. You can keep your respective accounts and simply transfer an agreed amount to your joint account to pay for any expenses you share. This way you will have the best of both worlds.

Image result for marriedCommon financial goals

The financial goals that you set when you live alone and do not plan to get married may not meet those of your future spouse. It is therefore important to discuss which goals are most important to you and to decide together which ones you will work towards.

  • Where do you want your finances to be in the near future?
  • Where do you want your finances to be in the future?
  • What’s the most important saving for a home, retirement or rainy days?

Make a budget

Now that you know your common financial goals, you need to know how you will achieve them. Creating a budget should help you put a plan into action. You should discuss your spending habits here. Since you are now a team working towards the same goal, it is important to be open and enthusiastic to adjust your previous habits. Make sure both of you are willing to compromise on some expenses or lusts. If one of you feels forced to make more concessions than the other, you may find yourself facing more important issues in the future.

Honesty should always be your policy

We all have our vices and if one of yours is to shop online, go out to eat in five-star restaurants or anything that runs around spending big amounts of money, make sure your spouse knows about it. Finances are already quite stressful without lies; make honesty a priority. In addition, it would be time also to mention any debt that you may have failed to update so far.

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Your money, your wedding, your plan

Remember that this is your wedding and your money, so treat the subject the best way together. The worst thing to do is ignore your finances, have only a few discussions, make plans, and start feasting.