topic Re: Personal Loan With Lower Income in Personal Finance

Personal Loan With Lower Income

Creditjourney784 — Mon, 29 Jul 2024 10:44:42 GMT

I am hoping to see if anyone has experience getting approved for a personal with an income around 25k and credit around 720. My husband has some credit card debt we're looking to consolidate (around $12k) but I was hoping there were lenders who may be more accepting of a lower income with decent credit. He is on a fixed income but can definitely afford the payments. I have had luck getting loans with DCU and PSECU to consolidate some of his cards but don't know how they are when it comes to income. Also, my credit is not as good as his (680s) so I don't think co-signing would work. We are throwing every spare dime at the cards also but would prefer to consolidate and hopefully save on interest. Anyone have lenders in mind that we should look at?

Re: Personal Loan With Lower Income

CreditCuriosity — Mon, 29 Jul 2024 12:02:07 GMT

Will all come down to DTI likely. Referring to housing, car, etc as payments on that for 36 month term will be round 400-450ish/mo approx just out of my head math

Re: Personal Loan With Lower Income

FlaDude — Mon, 29 Jul 2024 15:12:00 GMT

When I needed consolidation loans, I used the pre qual tools at Credit Karma and Nerd Wallet. Wallethub and other sites also have them. For a soft pull, they will show any possible loan offers and the rates. While the prequal is not garanteed approval, I applied for 3 at various times and was approved for all three at the advertised rates.

You can also shop other lenders, but the pre qual tools will shop a bunch at once for you.

Re: Personal Loan With Lower Income

IsambardPrince — Mon, 29 Jul 2024 20:07:09 GMT

@Creditjourney784 wrote:
I am hoping to see if anyone has experience getting approved for a personal with an income around 25k and credit around 720. My husband has some credit card debt we're looking to consolidate (around $12k) but I was hoping there were lenders who may be more accepting of a lower income with decent credit. He is on a fixed income but can definitely afford the payments. I have had luck getting loans with DCU and PSECU to consolidate some of his cards but don't know how they are when it comes to income. Also, my credit is not as good as his (680s) so I don't think co-signing would work. We are throwing every spare dime at the cards also but would prefer to consolidate and hopefully save on interest. Anyone have lenders in mind that we should look at?

Having half your income in debt is really just not acceptable. Living off of credit cards just takes an emergency and turns it into a catastrophe.

Asking how you can get more debt while you're making half as much income as you need to scrape by and half your income is debt already is like stumbling into a bar drunk and asking the bartender for some Bacardi.

I would clean up the mess using whatever I had to. If I couldn't make more money I'd file bankruptcy, I wouldn't care. Been there, done it, T-Shirt.

Albeit mine became more like 1,500% debt to income overnight. Man plans and God laughs. If I wasn't acutely aware of the fact that your financial situation could have been better and deteriorated rapidly to this point, I'd ask which creditor gives people with very little income $12,000 of debt. A creditor who knows you barely have any money and puts you $12,000 in debt anyway brought it on themselves if they don't get paid.

In my case, my ex and the State "fired some torpedoes", and they hit my financial "ship" right in the "munitions storage room" setting off all sorts of "secondary explosions" until the situation became too dire to fix. Bankruptcy was the only option. I went from an 806 I Love Debt Score, to a 492 in six months, and being broke sucked it out of me, the thought that I should be embarrassed. I was humbled. I was on my knees in a cheap motel room asking God for help. "Oh God, Oh God, it's all coming down! What did I do? Oh God, what did I do? Please help me!" I didn't know if I was being listened to or not, but I felt it couldn't get much worse. I filed bankruptcy, and it was better. It was not the end of the world, it was a new beginning.

I woke up and drank my coffee and the sun came up and I knew it would be okay.

Two people and $25k income would already be qualified for the court waiving the bankruptcy filing fee and the debtor's education fees.

Half the income in debt is unacceptable, and there really is no way to pay over $12,000 in high interest debt off on $25,000 income unless you're living in the basement of someone's home rent-free, and then I'd say get cracking. At credit card rates it doubles every three years or so, and minimum payments are basically just saying "Don't sue me this month please." Especially if you're still using the cards every time you pay a little off. But honestly, they'll put a warning about taking 27 years to pay them back at that rate.

As far as taking on _someone else's debt_, dicey, even if that is a spouse. The Book of Proverbs has a couple of entire passages on co-signing on someone else's debts, or assuming their debts. It basically boils down to if you do it, you will be called on to pay them back. Co-signing or assuming debt that you are not personally in is asking for trouble. You are not doing someone else a favor, you are enabling them to escape consequences while their creditors come after you. It is a disservice, to yourself. Right now, it sounds like it's all your spouse's debts, so if you don't live in a Community Property State, they're the only one that has to file bankruptcy. And believe me, your bench is broken, your bank is rupted. Or at least, your husband's is. Do not sign anything. That's my best advice.

"Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you."

It doesn't matter what your I Love Debt Score is if you're drowning, and this is drowning. And I had to learn the part about my bed being snatched up from under me. It was, actually. I had just bought a brand new bed and I lost that too when I had to flee my home.

Credit cards are not "emergency funds", they're "throwing gasoline on the fire".

Re: Personal Loan With Lower Income

FicoMike0 — Mon, 29 Jul 2024 19:54:46 GMT

I tend to agree with @CreditCuriosity . You mention two cus , is he a member? That might help. You don't want to cosign, but he might still be able to include your income as "household" income. That could help dti. I'm sure others here know the answer.

Re: Personal Loan With Lower Income

IsambardPrince — Mon, 29 Jul 2024 20:03:53 GMT

@FicoMike0 wrote:
I tend to agree with @CreditCuriosity . You mention two cus , is he a member? That might help. You don't want to cosign, but he might still be able to include your income as "household" income. That could help dti. I'm sure others here know the answer.

When you say you don't want to co-sign a debt or assume a debt you need to say it more like this.... *clears throat*

DO NOT CO-SIGN ANYTHING EVER AT ANY TIME FOR ANY ONE!

I'm so glad I can be helpful. For effect, read that in Sam Kinison's voice and add one of his trademark screams at the end.

"They will leave you with their debt! They will leave you with THEIR debt! They will LEAVE YOU WITH THEIR DEBT if you co-sign!" Ahhhhhhhhh!!!!!!!

Re: Personal Loan With Lower Income

IsambardPrince — Mon, 29 Jul 2024 20:12:50 GMT

@CreditCuriosity wrote:
Will all come down to DTI likely. Referring to housing, car, etc as payments on that for 36 month term will be round 400-450ish/mo approx just out of my head math

So in other words, exactly what I said, even if they get a personal loan, which they probably will not seeing the hole they're in anyway and no respectable lender would want to touch that for less than the credit card interest they're already paying...

It wouldn't actually solve a problem.

$12,000-ish at 30%-ish with an income of $25k-ish means their bench is broken regardless of whether they want to declare it or not. Right now they just suffer and twist.

The lenders have them in a headlock, shouting "Say Uncle!" and they're asking for more.

Re: Personal Loan With Lower Income

Anonymous — Mon, 29 Jul 2024 20:32:09 GMT

@IsambardPrince wrote:
A Text Wall

I would clean up the mess using whatever I had to.

I believe that the OP is in the process of doing exactly that. Hence the questions asked.

A creditor who knows you barely have any money and puts you $12,000 in debt

How exactly does someone who lends someone money PUT them in debt?

This is a retorical question and DOES NOT require yet another Text Wall from you.

Re: Personal Loan With Lower Income

IsambardPrince — Mon, 29 Jul 2024 21:11:37 GMT

@Anonymous wrote:
@IsambardPrince wrote:
A Text Wall

I would clean up the mess using whatever I had to.
I believe that the OP is in the process of doing exactly that. Hence the questions asked.

A creditor who knows you barely have any money and puts you $12,000 in debt
How exactly does someone who lends someone money PUT them in debt?
This is a retorical question and DOES NOT require yet another Text Wall from you.

You are incorrect. In fact, I would go further and say I'm the only person in this conversation that is giving them reasonable advice on how to deal with where they are now. A lender should know who is asking for money by evaluating their income and their expenses and their ability to repay.

A debtor should know when they've gone too far and there's no way to realistically deal with this mess. Ideally, if an emergency comes up that you can't pay for, cut the credit cards up and cancel them and find some other way, but he didn't do that, and we don't even know if it was an emergency that led to this or the typical behavior of "I made $30,000 last year, how do I buy a boat?" that comes up so often on these forums.

Either way, 50% of a $25k income at 30% means you're in trouble now and you have to deal with it, and taking another loan is not dealing with it.

Trying to get a personal loan, which will be almost as harsh as the credit card people if they can even find a lender so reckless as to give them one at this point is like saying you fixed a severe bleed by bandaging it well enough you'll run out of blood in 30 minutes, not 27. Worse, it makes it the other spouse's problem, which leaves her with the debt if he leaves, or anything happens to him.

Someone stupid enough to hand this much money to people in poverty shouldn't expect good things to happen.

Anyway, I can tell you how I'd handle a spouse who put $12,000 we don't have on credit cards we can't pay.

"Hahahahhaa!!!! Bye!"

Again, that would be me.

When you are married to someone, you owe them love and you owe them the responsibility of being a reliable partner, when one goes out and binge spends on a bunch of credit cards and then tells you to bail them out, that's like....not your job and stuff.

There's two options for dealing with debt on low income. They basically boil down to this. Put on your big person pants (I said person because I am a modern man.) and go to work and make more money and deal with it. -or- If making more money is impossible, go tell a judge you can't pay your bills.

Going to bankruptcy court is humiliating. It is. But at the same time, I was able to keep everything that mattered, including my sense of humor.

My in-laws found out I filed bankruptcy and told my husband I was a failure and they struggle under the weight of a million dollars of crap they shouldn't have taken on. And I responded by wagging my tongue and flapping my hand to mock her whining about my bankruptcy and then laughing at her. I'm made of stronger stuff than that, lady. Don't even go there.

Today I have something like zero debt at zero interest, I sleep well, and I'm not fearful that one slip up means that some dumb bank that's picking my pocket for interest on a car I don't own will take my car. That's the only important difference between debt and no debt.

It's not that nobody will lend us money. I could go buy an $80,000 war wagon that's as big as a house and as aerodynamic and work myself to death worrying about how to pay for it. It's just not important to me. I've learned. I was blind and now I see. I know that music and I'm not going to dance to it again.

Re: Personal Loan With Lower Income

Anonymous — Mon, 29 Jul 2024 21:55:58 GMT

@IsambardPrince wrote:
@Anonymous wrote:
@IsambardPrince wrote:
A Text Wall
Replied with yet another Soap Box Text Wall

@IsambardPrince wrote:
@CreditCuriosity wrote:
Will all come down to DTI likely. Referring to housing, car, etc as payments on that for 36 month term will be round 400-450ish/mo approx just out of my head math
So in other words, CreditCuriosity previously said exactly what you said

Re: Personal Loan With Lower Income

Creditjourney784 — Tue, 30 Jul 2024 00:07:36 GMT

@Anonymous
Thank you for understanding where I'm coming from. We are in the process of cleaning everything up. He's already in $12k debt so I'm not sure how moving it to a lower interest rate $12k debt means the world is ending. Thanks again.

Re: Personal Loan With Lower Income

Creditjourney784 — Tue, 30 Jul 2024 00:08:31 GMT

@IsambardPrince
I appreciate you telling your story and I always think it's helpful to hear what other people have lived through but I think you made many assumptions in your reply. Nowhere in my post did I say our household income was $25k. If it was, I would agree with your advice but it is not. We have already paid off a substantial amount of the credit card debt that was racked up when he fell sick years ago. I am quite proud of what we have accomplished thus far and consolidating the remaining $12k to a lower interest rate for us to pay off faster seems pretty smart to me. You said yourself that with credit card rates your debt doubles every 3 years. Wouldn't it make sense to get a fixed payment for a fixed period of time? (Cards are cut up)

Re: Personal Loan With Lower Income

Creditjourney784 — Mon, 29 Jul 2024 23:59:50 GMT

Thank you! Thats a good idea. We will start there.

Re: Personal Loan With Lower Income

Creditjourney784 — Tue, 30 Jul 2024 00:10:19 GMT

@FicoMike0
Thanks! I didn't think lenders would put weight on household income instead of just individual income. If they would that would be great.

Re: Personal Loan With Lower Income

Anonymous — Tue, 30 Jul 2024 00:12:45 GMT

@Creditjourney784

Have you considered Balance Tranfer credit cards with a 0% APR BT promo as an option? If that is an option ?

Re: Personal Loan With Lower Income

IsambardPrince — Tue, 30 Jul 2024 00:15:02 GMT

@Creditjourney784 wrote:

@IsambardPrince
I appreciate you telling your story and I always think it's helpful to hear what other people have lived through but I think you made many assumptions in your reply. Nowhere in my post did I say our household income was $25k. If it was, I would agree with your advice but it is not. We have already paid off a substantial amount of the credit card debt that was racked up when he fell sick years ago. I am quite proud of what we have accomplished thus far and consolidating the remaining $12k to a lower interest rate for us to pay off faster seems pretty smart to me. You said yourself that with credit card rates your debt doubles every 3 years. Wouldn't it make sense to get a fixed payment for a fixed period of time? (Cards are cut up)

I must have processed it wrong because it looked earlier from skimming that it was $12k debt on $25k income, and that would be a catastrophic amount.

If you make enough that paying it off at a lower interest rate makes sense, I would first contact the credit card companies and ask for hardship programs. They give these out sometimes and it can be so much better than a debt consolidation loan.

If that doesn't work, try a balance transfer card like the Wells Fargo Reflect and pay it off within 21 months if that's possible, if not possible, don't do that.

Only then would I be talking about a personal loan for debt consolidation.

Whatever you do, don't take on any more debt, not even a dollar. This has to go away.

Taking out a balance transfer card may not make the most sense because of the credit line you might get having so much debt already making it impossible to move it all over. Then again, you may get lucky. There's also the balance transfer fee which is better than interest but still a fee.

Re: Personal Loan With Lower Income

FicoMike0 — Tue, 30 Jul 2024 02:37:37 GMT

As far as dti, it might help if your husband has no housing expense. Do you pay it, not him? Could anyone tell otherwise? If his monthly mins are ~$450, that's a dti of ~22%, which is considered very good.

Re: Personal Loan With Lower Income

FicoMike0 — Tue, 30 Jul 2024 02:55:54 GMT

The 0% intro card is worth looking into. The wf card mentioned is great for the 21 months, but it has a 5% transfer fee. Still a good deal. Works out to $12000 X 1.05/ 21 = $600/month for 21 months. Other problem would be getting a $12000 credit limit, not likely. Still, after getting a 0% card, you'll have a smaller personal loan to look for.

As far as 0% cards here's a resource, pay attention to the transfer fees as well as term, few are 21 month,

https://www.doctorofcredit.com/list-of-0-apr-credit-card-offers/

Re: Personal Loan With Lower Income

IsambardPrince — Tue, 30 Jul 2024 03:58:00 GMT

@FicoMike0 wrote:
The 0% intro card is worth looking into. The wf card mentioned is great for the 21 months, but it has a 5% transfer fee. Still a good deal. Works out to $12000 X 1.05/ 21 = $600/month for 21 months. Other problem would be getting a $12000 credit limit, not likely. Still, after getting a 0% card, you'll have a smaller personal loan to look for.
As far as 0% cards here's a resource, pay attention to the transfer fees as well as term, few are 21 month,
https://www.doctorofcredit.com/list-of-0-apr-credit-card-offers/

They gave me a gigantic limit on my Active Cash/Autograph. It would have been enough to clobber this thing with room to spare. That's with an (at the time) freaking three year old bankruptcy 7 on the old credit reports.

Wells Fargo throws huge credit lines at some really messed up credit profiles, which is why I suggested the Reflect (has to be the reflect). That and the extra 3 months at 0% that most balance transfer cards don't give you.

5% fee is less than ideal. But look at it this way, it gives you longer to pay it off at zero and by that time you'll be in less debt and can get a balance transfer card at some other bank for another 18 months probably if you have to in order to finish mopping this up.

You pay off a lot of this crap, your FICO score goes up, you'll probably get another balance transfer card.

Even paying 3-4% on the remainder on another card in 21 months would be better than a personal loan.

Just do not add one single dollar in debt.

Some people just keep cycling balance transfers and never pay it off. Don't do that. You get maybe one or two tries at it.

Re: Personal Loan With Lower Income

IsambardPrince — Tue, 30 Jul 2024 04:21:01 GMT

@Creditjourney784 wrote:
@FicoMike0
Thanks! I didn't think lenders would put weight on household income instead of just individual income. If they would that would be great.

Most credit card applications let you use the income of you and anyone whose income regularly goes to pay your bills if you're over 21.

But most personal loans only allow one person's income on the application.

So you might be able to sign up for a balance transfer card like the Reflect and get approved easier if you both have income.

If you have no debt and a better credit score, you'd be more likely to get the card and a reasonable limit.

I don't mean this the wrong way, but make sure before you do this that you're on good terms with your partner. You'd know better than I would.

I've been financially ruined by an ex unfortunately.