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Personal Loan for Debt Consolidation vs. other options

Regular Contributor

Personal Loan for Debt Consolidation vs. other options

Hi all,
I am considering applying for a Peary loan from my CU for debt consolidation as well as finance a couple home improvements. The reason I'm looking to consolidate is because we recently incurred an IRS bill of about 4500 that needs to be paid off ASAP. We would also like to list our home for sale in the next year or so. Home needs a few updates. Just looking for some feedback, advice/guidance for the best way to tackle this debt. Background: BK 7 d/c'd 12/15. (Rebuilding ok), HH income ~100k. My husband an I both work, 2 kids, and my retired parent lives with us. CC debt is approximately 4500. Car loans total 440. Payment plan with IRS of about $100 per month.
CC balance is combination of 2 cards. One is 0% currently and the other is on a bal transfer I just did at 2.99. Been working to get them down but I was thinking it might be easier if I was only making payments to one place.... we also want to do a few small projects in our home, we would get another 2000-2500 extra for that. Our CU offers personal loans with a rate of 9.9% for 60 months. Our payments would be about 170 a month on that. I was also thinking about consolidation with a HELOC. But I have NO experience with them. Any advice on that would be appreciated. Just trying to figure out the fasted and cost efficient way to get this debt taken care of..... I know... we are newly out of a BK and due to some unforeseen events ended up with this debt. We want to tackle it before it gets out of hand. Thanks
6 REPLIES
Established Contributor

Re: Personal Loan for Debt Consolidation vs. other options


New_beginning0715 wrote:
Hi all,
I am considering applying for a Peary loan from my CU for debt consolidation as well as finance a couple home improvements. The reason I'm looking to consolidate is because we recently incurred an IRS bill of about 4500 that needs to be paid off ASAP. We would also like to list our home for sale in the next year or so. Home needs a few updates. Just looking for some feedback, advice/guidance for the best way to tackle this debt. Background: BK 7 d/c'd 12/15. (Rebuilding ok), HH income ~100k. My husband an I both work, 2 kids, and my retired parent lives with us. CC debt is approximately 4500. Car loans total 440. Payment plan with IRS of about $100 per month.
CC balance is combination of 2 cards. One is 0% currently and the other is on a bal transfer I just did at 2.99. Been working to get them down but I was thinking it might be easier if I was only making payments to one place.... we also want to do a few small projects in our home, we would get another 2000-2500 extra for that. Our CU offers personal loans with a rate of 9.9% for 60 months. Our payments would be about 170 a month on that. I was also thinking about consolidation with a HELOC. But I have NO experience with them. Any advice on that would be appreciated. Just trying to figure out the fasted and cost efficient way to get this debt taken care of..... I know... we are newly out of a BK and due to some unforeseen events ended up with this debt. We want to tackle it before it gets out of hand. Thanks

Curious . . .why the rush to pay off the IRS when it's on a payment plan? Penalties and interest come out to 6% annually . . less than the 9.9% on the personal loan.

 

Also unsure about transferring the 0% and 2% CC balances to a higher rate loan.

 

I understand wanting to spruce up your home for sale and the personal loan could make sense there. If you go that route, pay it off with the proceeds from your house so you're not continuing to make payments on something you don't have anymore Smiley Wink

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Regular Contributor

Re: Personal Loan for Debt Consolidation vs. other options

Hi. Thanks for your reply. The transfer to really low interest rates to a higher rate is definitely a concern. But I figured I could consolidate the cc debt plus finance home improvements and yes pay off the remaining balances once we sell our home. I'm not really in a rush to pay off IRS per say. Originally, we just decided to make a payment plan and pay that off with the sale of the home as well. I currently pay about 500 a month to both the cards. I could pay 400 a month on the personal loan and pay that down quickly. If there's anything left when we sell the home, just pay the balance off then. I'm not planning to include the IRS debt into this loan. Im basically trying to think of the smartest way to take care of it all and not increase money paid out monthly 😊
Valued Contributor

Re: Personal Loan for Debt Consolidation vs. other options

Hi OP, what did you decide?


Regular Contributor

Re: Personal Loan for Debt Consolidation vs. other options

Hi. I haven't made any moves thus far. We have made a payment plan with the IRS in the meantime. But have not yet decided to consolidate or not. I think we will reassess once our low/ no interest periods are coming close to ending and see where we are. We still need to do the updates too. So idk
Community Leader
Super Contributor

Re: Personal Loan for Debt Consolidation vs. other options


SteelerNYC wrote:

New_beginning0715 wrote:
Hi all,
I am considering applying for a Peary loan from my CU for debt consolidation as well as finance a couple home improvements. The reason I'm looking to consolidate is because we recently incurred an IRS bill of about 4500 that needs to be paid off ASAP. We would also like to list our home for sale in the next year or so. Home needs a few updates. Just looking for some feedback, advice/guidance for the best way to tackle this debt. Background: BK 7 d/c'd 12/15. (Rebuilding ok), HH income ~100k. My husband an I both work, 2 kids, and my retired parent lives with us. CC debt is approximately 4500. Car loans total 440. Payment plan with IRS of about $100 per month.
CC balance is combination of 2 cards. One is 0% currently and the other is on a bal transfer I just did at 2.99. Been working to get them down but I was thinking it might be easier if I was only making payments to one place.... we also want to do a few small projects in our home, we would get another 2000-2500 extra for that. Our CU offers personal loans with a rate of 9.9% for 60 months. Our payments would be about 170 a month on that. I was also thinking about consolidation with a HELOC. But I have NO experience with them. Any advice on that would be appreciated. Just trying to figure out the fasted and cost efficient way to get this debt taken care of..... I know... we are newly out of a BK and due to some unforeseen events ended up with this debt. We want to tackle it before it gets out of hand. Thanks

Curious . . .why the rush to pay off the IRS when it's on a payment plan? Penalties and interest come out to 6% annually . . less than the 9.9% on the personal loan.

 

Also unsure about transferring the 0% and 2% CC balances to a higher rate loan.

 

I understand wanting to spruce up your home for sale and the personal loan could make sense there. If you go that route, pay it off with the proceeds from your house so you're not continuing to make payments on something you don't have anymore Smiley Wink


OP, This is excellent advice^^^^...

Regular Contributor

Re: Personal Loan for Debt Consolidation vs. other options

DEFINITELY would be paying off that debt with the proceeds!