Since I've been separated, I became responsible for 3 credit card accounts, one of which I am a joint user. The other 2 do not have my name on them, but I am still responsible for paying them off. They are Best Buy, Chase and Sears. These accounts, with their high interest, have been a noose around my neck for years. I owe a total of about $4000. My minimum monthly payments are combined, around $200 a month.
I have a newer vehicle which will be paid off in about 6 months. The payment is $380 per month. I know the prevailing wisdom is to use that money, when the vehicle is paid off, to put towards the credit card bills. However, I was wondering about a consolidation loan.
The equity in my vehicle is about $10,000, so in six months............I thought about borrowing against the equity for a $4,000 loan. I know that cash for title places are high interest, but does anyone know any banks or credit unions that might be willing to do a secured loan for a consolidation, putting my vehicle title as collateral?
Currently, money is tight and paying off my vehicle is going to be a huge help for me financially. I can't really afford to pay more than my minimums right now or anytime in the next year. This way, at least according to my thinking, is that the cards will be paid off, I will have one, scheduled payment each month and hopefully it will be paid off within 2 years.
Any advice?
I would advise you to do a 5 year loan at prosper.com
People loan you money and you pay them back. Keeps money out of a greedy title loan company or bank and instead gives it to your peers.
I would suggest you use the loan to pay off the car and the credit cards. This will imediately free up your budget so you get out of the jam you are in.
The payment for the credit cards and the car combined will be around $200. There is no prepayment penalty, so when you can afford to pay more it will lower your interest costs and shorten the duration of the loan.
I would not take out a loan against my car note if its paid off. Just because I wouldnt.
Go to a local CU and get a consolidation loan would be your best route if your not part of one there are a few national CUs like DCU.
What is your profile and scores like?
Go to a local CU and get a consolidation loan would be your best route if your not part of one there are a few national CUs like DCU.
What is your profile and scores like?
tu at myfico is 660. No lates or derogatories in the last 4 years. In the process of changing careers, income has taken a hit, from 55k to about 25k.
Did you check out prosper?
It is a soft pull to get the rate and a hard pull if the loan funds.
I use it as a way to get a free credit score...lol
@Dustink wrote:Did you check out prosper?
It is a soft pull to get the rate and a hard pull if the loan funds.
I use it as a way to get a free credit score...lol
which CR score do they provide or is it a fako?
Starting Score: EQ=665,TU=618 on Oct 9,2010Just tried Prosper.com
They pulled a 681 credit score, Awaiting verification.
The interest may be high, but I figure I'll spend about $1200 in the next six months just on minimum payments.
I'll update upon approval or denial
@BornSupercharged wrote:Um prosper is a rate ripoff. Try LendingClub , my wife has 2 loans through them and I have one. They all funded 100% and we got lower rates than our cards were which has helped us consolidate and pay card balances. Prosper's APR offer was literally 6-7% higher than LendingClub's.
The requirements for a lending club loan are more strict. I wasn't thinking OP would get approved at lending club.