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Question By
Thaun

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Debt Consolidation Loan
I applied for a personal loan to consolidate debt and I was denied on the basis that my debt/income ratio was too high. I qualified for half of what I needed at their lowest interest rate due to my good credit score. This particular credit union said that even with a cosigner they would only take my debt/income ratio into account.

Is this standard practice? Are there other options? I am only interested in a low APR personal loan to consolidate a credit card and another loan with a high APR. My income/debt ratio is high due to my student loans.

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There are other options

you might try one of the on-line lenders,  They tend to be a little more forgiving on the Debt to income ratio.  I have used Lending Club in the past. With a good credit score you might have a good chance of getting what you need.  Current rates are in the 5-7% range depending on your score.  

the only drawback i have found with tehm is that they only report to the Credit bureaus once a quarter. so your payments aren't reflected on your score right away.  But I could live with that rather thatn high card interest rates. There are a lot of on-line lenders now but be careful of appling to many places trying to find a better rate, each inquiry will bring down your score as well.

Good luck

Reply by
Thaun

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Thanks for the advice... however I don't think Lending Club is an option. Pretty sure the Debt/Income ratio is a dealbreaker and from what I have read, lending club has pretty stringest borrowing requirements

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I am suprised that the credit union did not do it.  Some lenders will go beyond the debt/income as long as they write the checks to the lenders directly. You would never see the money. This way they know your monthly debt outlay will be down.

Lending club is not the only on-line lender. I would research some more and see if you can find one that would be willing to pay direct to CC companies and allow take the reduction in debt/income post payment.

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