How get consolidation loan for 50k

[pat0812]

Hi

I have 9 credit cards with total limits of 110k and my balances are at 50k now
I bought a house last year and spend a lot in it.
I know this is bad but the good news is that I make about 90k as w2 income and another 30k from business income for a total of 120k a year

At the moment I pay 1,400 a month in credit card payments but a big chunk goes to interest and I feel I’m not going down much in balance

My mortgage payment is $2,800 a month
My car $800

So mortgage, car and credit cards i have for $5,000 a month and im fine with it because I make enough to handle that

I wanted to know based on my income and on my income to debt ratio if any bank would give me a loan to pay of all those debts. I rather pay 1 lender a month with a fix interest rate than pay 9 lenders and higher interests.

The only reason my credit score is low is because of high balances. I don’t have missed or late payments ever and nothing bad. When i had low balances last year when I applied for mortgage I had over 740
Now im between 640 - 670 range

Any idea who would give me a debt consolidation loan?

[Anonymous]

An unsecured signature loan for $50,000 isn't going to be easy with your scores because there's no guarantee to the lender that you will use it to pay down debt, and also no guarantee that you won't just immediately run credit cards up again.

I'd suggest posting each credit card limit + current balance and maybe we can guide you to what you should pay down to get your utilization (individual AND aggregate) to a better place to increase approval odds.  I doubt you'll get anywhere near $50,000 regardless.

With your income and fixed expenses, I see no reason why you can't just pay all the cards off in 15-18 months as it is.  There's absolutely no way someone making $130,000 with only $3600 in installment loans plus basic household expenses can't throw $3000 a month at the debt to nuke it.  Send 3X minimum payments to the lowest interest cards and the rest to the highest interest card to knock it out quickly, then repeat with the next highest interest card.

[pat0812]

I make 120 and not 130
Its 10k a month but minus taxes i have 7k left a month
So I pay 5k a month in debts and the other 2k goes to bills, food

[wa3more]

Unless you have some tax returns maybe for last 2 years they may not count self emp income. 

[pat0812]

I have 3 years of self employment tax returns

[pipeguy]

For right now, from outside looking in, you are overextended with a $2800 mortgage (ouch) and an $800 car payment?  (another ouch). It also seems that you are spending everything you get every month (very dangerous move). 

This might seem harsh, but you need to work on crushing that high APR credit card debt - pick the highest APR and pay it off as fast as possible, then repeat with the next card and the next. I make more than you do and don't pay $800 a month for two cars and we are not talking beaters or econoboxes. Add in insurance and gas, etc and you are paying at least $1000 a month for only a car (probably $1200+). Cut back on entertainment, "food", especially eating out. Look at your phone/data/cable and cut back. This is advice usually given to someone that can't pay their bills, but given the interest you are paying on $50k of revolving debt you are heading for disaster. 

As an example, a $50k loan @ 18% (using a typical CC APR), at a fixed payment for 48 months would be $1469 a month with $20,500 in interest paid over the term of the loan - cut this down to only 9.99% and your payment would be $1268 a month and $10,859 in interest. The difference is you are paying interest on interest (which becomes principle) every month on revolving debt. Given that any prime lender would consider you overextended, even with a $120k income, you are not going to get prime interest rates on a consolidation loan. 

Again this probably sounds harsh, but you are not in credit "trouble" due to job loss or medical issue, you are overspending and that is where you will find your solution - create as much free cash as possible through reduced spending and then take that cash and attack your credit cards one by one until they are paid. 

The golden rule for credit cards is if you can't pay the bill in full every month or carry a short-term 0% interest payoff think Blispay, 0% Amazon or Lowes (etc) for major purchases and pay that it full when due, don't buy it on a credit card.   It'll take some work and short-term "suffering" to dig out of your hole.

Best of luck!

[SBR249]

Right off the bat, 58% of your gross income is taxes and mortgage which you can't do anything about.

So moving on, your car payment, can you bring that down? $800/mo is a lot of money a year for a car. Is this a lease or a car loan? Can you refinance to a longer term with lower payments? 

You budget $2000 for bills and food. Can you think of any way to cut back? I'm not saying baked beans and ramen but any eating out expenses you can dump? Any impulse splurges you can curb at the supermarket? Are there any bills you can cut back on? Downgrade cell plan to a prepaid? Cut out cable/netflix? Turn down the thermostat a degree or two? Get a slower internet connection or switch providers to get a better intro offer? 

You are paying $1400/mo for CC but consider for an aggregate balance of 50K at an average APR of 20% that's 10K a year of interest alone, which is more than half your monthly payment. You should aim for at least 20% of your gross income as CC payments, preferably 25%.

And then there are some exotic options:

- You can take up another side gig, drive for uber, deliver for Amazon, any other side job you can think of

- You can delay whatever taxes you have control of paying. You can ask if you are eligible to set up a payment plan with the IRS. In general, the interest rate that the IRS charges for underpayment is the federal short term rate + 3% adjusted every 3 months and compounded daily. That means the IRS charges about 4-5% right now for underpaid taxes which I would imagine is much cheaper than what your CCs are charging. So you may want to consider whether you can delay your taxes to pay off those CCs. 

- Rent out part of your home (only if it's feasible with minimum expense to begin with)

- Borrow from a relative if you have one who is willing. Be upfront with them, offer them a legal contract and a competitive interest rate. And obviously don't default. 

[Anonymous]

Any idea who would give me a debt consolidation loan?

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I doubt any bank will give you so much of unsecured loan. But the peer-to-peer lenders such as Lending Club, Prosper, SoFi can come close to it. Most of them give out upto 40K. But SoFi can go upto 100K with good verifiable income. You can even try Discover personal loan; but they will probably not go beyond 35K. Most of these lenders will allow you to fill out an application online and get your approved .amount and APR with just a SP on your credit reports. These are usually guaranteed offers. If you want to proceed further and apply for the loan, they will do a HP.

[Anonymous]

Everything pipeguy and SBR said.

Your budget is more of a problem than your interest rates. Housing, car, and general spending need some changes to get you out of this.

[Anonymous]

I didn't even notice the $800 auto loan.  Ouch indeed.

One thing you look into, depending on the area you live in, is to rent your fancy car on Turo 24/7 and buy a reliable beater for $2000 cash.

I didn't own cars for 7 years because bus+train+uber was cheaper, but I bought a few EVs in 2017 and rent all of them on Turo for as much as $75 per day.  Cars are valued at around $22,000 (NADA) and in 2017 I made enough to cover 60% of equity in every car and I expect to pay 100% of equity off in 2018.  I live near a huge airport, though, so it's easy for me to keep my cars rented and not in my driveway (annoying the neighbors).  I don't expect Turo to last past 2019, so if you CAN rent your car out now, DO IT.  If you can make $70 a day on a luxury car and rent it out 15 days a month, you pay off your loan AND pay off your reliable beater without taking a penny out of income.  Roll all that money into debt.

I'm going to the auto auction this month to buy a van to rent on Turo since most vans are getting as much as $150 per day in my area.  Absolutely insane that folks spend that much borrowing a truck.