First, if no collateral was offered, it isn't insufficient. You know that. Why not, "Other: Sufficient collateral would be required for the amount and time requested".
Your loan policy should support the terms and conditions. If it doesn't, I'd change it. You might also educate the lenders (emphasis on plural if you have more than one) so they are on the sheet of music. There may be additional reasons which should be listed.
I was not a proponent of consolidation loans when I worked the loan desk and I would not tell a lender they need to make these deals if they are not comfortable with them. But the loan policy and your judgmental system of approving them should support this so decisions are made in a consistent manner.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell