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Credit Cards Maxed Out. I Can’t Get a Debt Consolidation Loan. – Manuel

“Dear Steve,

Hi. I currently have 1 credit card just about maxed out at $10,600, another one maxed out at $5,300. I also have a debt consolidation loan from Banknorth for $11,000 (although I paid around $3,500 so I only have $7500 remaining to pay.) I gross about $2240/mo. I was laid off last year so had to use my cards to pay for everything.

I ran my credit report and have no late payments at all, the problem is that I’m only paying the minumum payment on my credit cards. I just tried to get another debt consolidation loan from Banknorth for 22k, so atleast I would be paying off the balance, not wasting money just paying the minimum. But they denied me.

Do you think it was because I already had a loan with them? Should I try the credit union at my job? Or is asking for 22k too much? Thanks.

Manuel”

Dear Manuel,

My best guess is they denied you because your credit score isn’t beautiful and after one consolidation loan you are maxed out again.

The underlying issue here is why you got so heavily in debt again after you already consolidated previously.

If I was a lender and you have a previous debt consolidation loan and now you are maxed out again, I’d run away from the deal. The odds are that people in similar situations will repeat and default.

If you have not ordered your credit score, use the link, do it now. If your score is over 660 then consider LendingClub.com as a source to get funds to consolidate. The credit union is also a good place to try.

But, the first step is to get that credit score and find out exactly where you stand. After you get your credit score, let me know what it is by posting it in the comments section below.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

READ  We've Consolidated Our Debt Over and Over But Continued to Live Beyond Our Means. - Steve
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P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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