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Question:
DEC 12, 2011

Advice if Not Qualifying for a Loan

Any advice for a person with fair credit on getting a loan?

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Bill's Answer: Bills.com Resident Expert

Unfortunately, you have probably chosen the worst time in recent years to try to obtain a loan. As you have probably heard on the news recently, the credit markets in the United States and abroad have pretty much dried up due to problems in the mortgage and banking sectors, so it has become difficult for anyone except those for exceptional credit to obtain loans. Even for those consumers with excellent credit, finding a loan has become difficult; since you say you have “fair” credit, you may not be able to find a loan for some time, at least until economic conditions improve. I am certainly not telling you to give up on looking for a loan, as you may be lucky and find a bank willing to give you the loan you need. To read more about debt consolidation loans, I encourage you to visit the Bills.com debt consolidation resources page. In addition, if you submit your contact information in the Bills.com Savings Center (for a debt consolidation loan), we can have potential lenders contact you to discuss the loan options available to you.

Given the current market conditions, you may find it easier to obtain a debt consolidation loan if you are willing to use your home or other real property as collateral for the debt. In fact, most “debt consolidation loans” are home equity loans secured on the borrower’s property, similar to a second mortgage. If you own your home or any other real estate, I would encourage you to explore a secured loan as an option to obtain the credit you need. Bills.com offers a wealth of information about home equity loans, available on the mortgage section of our website. Before you take out a home equity loan, I would advise you to make sure that the loan terms being offered are affordable and that you will be able to make those payments in the future. Unlike an unsecured loan, if you fail to make your payments on a home equity loan, the lender could foreclose on your property. However, if you find a secured loan which if affordable, this type of loan may benefit you by consolidating all of your debts into a single account, lowering your interest rates, and reducing your payments on your debt.

Unfortunately, I am not particularly optimistic about your prospects of finding a loan given the current economic conditions. Despite this fact, I encourage you to continue looking for a loan, as you may find a lender willing to offer a loan that suits your needs. Even if you are unable to find a loan to consolidate your debts, there are various other options available to consumers who are struggling with their debts, including credit counseling and debt negotiation programs. If you would like to read more about various debt relief options, I invite you to visit the Bills.com debt help page.

I wish you the best of luck in finding an option that fits your needs, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.bills.com/

Comments (2)


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Bills.com
December 23, 2009
From my understanding, there are lenders that will accept capital gains income. However, the capital gains income must be consistent over the course of, at least, the last two prior years. I encourage you to visit the Bills.com mortgage savings center for no-cost mortgage quotes from up to four pre-screened lenders.
Cindy C.
December 18, 2009
I am trying to get a home equity loan but am unable to qualify through quickenloans.com, so assume I may be unable to qualify through other mortgage companies. Our credit scores are 660 and 670 through myfico. We owe $29,000 on a home that is appraised at $195,000. We are behind on no payments. Our problem is that while my income is $80,000 annually, my husband is self employed and shows a loss on 2008 tax return. ($218,000 loss) But he also buys/sells cattle, and he has a $246,000 capital gain, which was showed on our tax return and we paid taxes on it. Our total income for 2008 was $90,000, and that is what we paid taxes on. The same thing happened in 2007, except we had a much bigger capital gain, and ended up having a tax bill of $60,000 b/c of it. Since then, we have taken the money from the buy/sale of cattle and tried to create more expenses on his other self-employment thorugh the purchase of hay/feed/equipment for tax purposes. The problem is that the mortgage company will not consider capital gain income as income, it just considers the loss on the farm, the $218,000, so it makes it look like we have a negative $4,000 monthly. Can you think of a bank or mortgage company that will consider the entire picture instead of just my income and my husband's income? They won't even look at our financial statement, where we have a $600,000 piece of property and owe approximately $90,000 on it, or other assets. Any ideas?
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