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How to get out of debt? Personal Loan?

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Valued Member

How to get out of debt? Personal Loan?

Good afternoon to everyone,

 

I got myself into a horrible situation... Currently I have around 30k in credit card debt. I try to figure it out how to get out of debt as fast as possible. I stopped spending on anything uneccessary of course but I need some help from people who actually know about this stuff. 

My credit is 691 Experian, 684 EQ, 691 TU. Total debt is 30k /70k limit. Current income is 72k. 

I was thinking about personal loans to get a lower rate ( my cards are around 18% avg.) however everyone turned me down so far... ( discover, amex, bestegg...) 

Any ideas? If I keep paying my credit cards I will end up paying these until 2024 according to a debt manager app on Ios. 

Also I had a credit around 760 and it clearly dropped...

 

Thanks for everyone's help. 

18 REPLIES 18
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Super Contributor

Re: How to get out of debt? Are personal loans safe?


@gkinter wrote:

Good afternoon to everyone,

 

I got myself into a horrible situation... Currently I have around 30k in credit card debt. I try to figure it out how to get out of debt as fast as possible. I stopped spending on anything uneccessary of course but I need some help from people who actually know about this stuff. 

My credit is 691 Experian, 684 EQ, 691 TU. Total debt is 30k /70k limit. Current income is 72k. 

I was thinking about personal loans to get a lower rate ( my cards are around 18% avg.) however everyone turned me down so far... ( discover, amex, bestegg...) 

Any ideas? If I keep paying my credit cards I will end up paying these until 2024 according to a debt manager app on Ios. 

Also I had a credit around 760 and it clearly dropped...


If you can get a loan from a credit union, fine.

 

Otherwise, give up on the idea of borrowing yourself out of the situation. Just start paying things off with the snowball method (pay off smallest balance first, then next smallest, etc).


Total revolving limits 653000 (575000 reporting)

Message 2 of 19
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Super Contributor

Re: How to get out of debt? Personal Loan?

First step is not to apply for any more personal loans -- in the short term anyway.  You are being turned down for these loans so applying is not helping.  On the contrary, it may be hurting you, since the lenders may be doing hard pulls of your credit reports, which hurts your score.

 

Do pull your credit reports, however.  Having frquent access to your reports is important when you are trying to improve your score.  Let us know if you need help getting frequent access to all three of your reports for free.  We can suggest a number of tools that will do that.

 

Would you mind listing all of your credit cards, along with their current balance and credit limit?  It's possible that we can suggest a concrete strategy once we see that.  List them like this:

 

Card 1.  Balance = ______   Limit = _____

Card 2.  Balance = ______   Limit = _____

Card 3.  Balance = ______   Limit = _____

 

If any of them are close to being maxxed out, then you'll want to pay those down first.

 

I think your idea of a personal loan might be ok, though you'll need to get your scores higher first, since you are being rejected for the loan now.  Higher scores will also get you lower interest loans, which in turn make the loan solution that much better.

 

 

 

Message 3 of 19
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Super Contributor

Re: How to get out of debt? Personal Loan?

I noticed too that you mention your "average" CC utilization as 18% but that you are 30k in debt with 70k in limits.

 

30/70 = 43%

 

My guess is that you are computing each card's utilization separately.  And then averaging the different utilization numbers, and that you have a few big limit cards that have a high utilization with several more low-limit cards with a zero balance.  That's the only way I can come up with that 18% number.

 

Regardless, averaging the different individual utilizations is not helpful.  You want to identify the cards that are highly utilized, and pay them down to under 49%.  That's your first step.

 

 

Message 4 of 19
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Moderator

Re: How to get out of debt? Personal Loan?

Hi @gkinter, I've merged your two identical threads into one.  Please refrain from cross-posting; it's hard to follow and goes against this site's Terms of Service.

 

Thanks,

--UncleB

myFICO Moderator

Message 5 of 19
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Valued Member

Re: How to get out of debt? Personal Loan?

Wow! First of all thank you so much for being this helpful. I will be able to answer all this for you tomorrow once I am able to sit down and write all this out , I hope that's ok.
Message 6 of 19
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Valued Member

Re: How to get out of debt? Personal Loan?

Good afternoon again,

 

My credit cards and their balance/ cl:

  • Best Buy CC- 4265/5000
  • Discover - 2930/3500
  • Amex BCE- 5264/25000
  • Amex Delta - 915/1000
  • Capital One Platinum- 0/800
  • Capital One Venture - 5402/5500 (0apr for a year)
  • Chase Sapphire - 8500-9000 ( 0 apr until november 2018)
  • Citi AA- 1000/8500

Even writing this down makes me feel stupid but I really need help. 

Any ideas? 

Message 7 of 19
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Senior Contributor

Re: How to get out of debt? Personal Loan?

Look for a part time job or work for Instacart and/or Uber for 15-20 hours a week. Could bring in $1000-$1500 a month extra for debt and you could be debt free in 12-18 months.

Shut off cable and broadband at home. Downgrade your phone plan or get a flip phone for $5 a month. If you have equity in a newer car, trade it in for a reliable beater for 2 years. Get roommates if you have spare bedrooms. Cut dining out, movies, streaming, Amazon Prime and anything unnecessary to basic survival. Bag lunches.

Not impossible to get out of debt in a year but it means no fun and entertainment for a year. Plus the sacrifices and extra work are a great education for making a budget to live by!

We have all been where you are today. Many of us had to cut back for 1-3 years to resolve it without BK.
Message 8 of 19
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Established Contributor

Re: How to get out of debt? Personal Loan?

If you have 30K in debt at an avg rate of around 18% APR and your loan calculator says it's going to take you until 2024 to pay off, that means your monthly payment is only around $700 which is about 10% of your gross income. Can you give a breakdown of how you are spending your money? 

Message 9 of 19
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Established Contributor

Re: How to get out of debt? Personal Loan?


@ABCD2199 wrote:
Look for a part time job or work for Instacart and/or Uber for 15-20 hours a week. Could bring in $1000-$1500 a month extra for debt and you could be debt free in 12-18 months.

Shut off cable and broadband at home. Downgrade your phone plan or get a flip phone for $5 a month. If you have equity in a newer car, trade it in for a reliable beater for 2 years. Get roommates if you have spare bedrooms. Cut dining out, movies, streaming, Amazon Prime and anything unnecessary to basic survival. Bag lunches.

Not impossible to get out of debt in a year but it means no fun and entertainment for a year. Plus the sacrifices and extra work are a great education for making a budget to live by!

We have all been where you are today. Many of us had to cut back for 1-3 years to resolve it without BK.

+1

 

Honestly with sites like Netflix and Youtube, I never even bothered signing up for cable after I got my first job in the Bay Area. Rent and utilities cost is tolerable if you find a good landlord and split the cost with a roommate -- I'm paying at least 30% below market for rent, and because me and my roommate are both misers, our total utilities cost (gas/electricity/internet) comes out to only ~$60-70/person/month.

 

Movies... Man the number of times I've been to an actual cinema in the last 5 years I can count on one hand. Dining out, now this is where you can save massive amounts of money if you eat out often. I limited myself to two fast food meals per week in the past 4 years. My health was certainly worse off for it, but my bank account certainly remained nice and fat LOL. Smiley Very HappySmiley Sad

 

 

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6/8/20:

Message 10 of 19
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