Personal Loan to payoff CC debit

[fig419]

My husband and I have gotten in a bit over our head. We were doing pretty good until this year, he's no longer getting the hours at work that we're used to.  At the moment we have 6 accounts plus an auto loan and mortgage.  We're not behind on payments but we're only able to make the minimum payments with no end in site.  Yesterday I visited Sofi to check for pre-approval and I'm in the application process but decided to wait to see if there was a better option/opinion.

Our scores (from Credit Karma) range from 691 to 704. 

All accounts in good standing, no lates, no bads.  Usage is 37% (that's what Credit Karma says).

HUSBANDS:

Kay Jeweler - $1,978 balance / $7,600 limit  at 21%

Lowes/SYNCB - $2,836 / $8,500 at 26%

Care Credit/SYNBC - $3,027 / $5,500 at 15%

auto loan 12,030.00 & mortgage 116,830.00

MINE:

Chase - $2,456 / $3,400 at 20% var

WalMart MC/SYNBC - $2,226 / $6,300 at 23.4%

Valero/DSRM - paid off

We're aiming to get a loan from Sofi for $13,000 to pay off all the credit debit. They estimate the loan to be around 9% for 3 years at $415/month. If this is correct we'd save about $100 per month and it would all be paid off in 3 years which is right about the time we will be looking to move and getting a new mortgage.

Sound good??  (thanks)

[RobertEG]

Taking out an installment loan to pay revolving debt is common, and can be beneficial both from a financial and credit score perspective.

It reduces interest and moves the debt deck chair from revolving to installment, thus improving % util of revolving.

The peril is the human reaction after reducing % util to thereafter charge those cards back up to their historical % util levels.

If you can resist that temptation, it is likely a good move.......

[fig419]

That's what my husband said too.  I told him we'd take all the cards and wrap the loan papers around them and put them in the safe.  That way we'd be reminded of the loan to even get to them lol!  But no, we are preparing to buy our last and final home once our youngest graduates.  It means more to us than anything we could put on those cards.  Plus we saw how fast they all built up. We were pretty much debt free 3 years ago, then this happened.

Thank you!

[Anonymous]

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@fig419 wrote:

That's what my husband said too.  I told him we'd take all the cards and wrap the loan papers around them and put them in the safe.  That way we'd be reminded of the loan to even get to them lol!  But no, we are preparing to buy our last and final home once our youngest graduates.  It means more to us than anything we could put on those cards.  Plus we saw how fast they all built up. We were pretty much debt free 3 years ago, then this happened.

Thank you!

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Live in Missouri? I'll be your real estate agent

You should pick ONE of the cards, the one with the best rewards, and still use it. BUT treat it as fi it were a debit card. Pay in FULL every month, or even several times a month, and never carry a balance.  Other than that, I second what RobertEG said, resist the temptation to run up any more CC debt, put it in your safe and as the Italians would say.... Fuhgetaboutih! 

The saying that always helps me keep my spending in check: "If you can't afford to buy it twice, you can't afford it."

[Anonymous]

We did this a few years ago when we had charged just a little too much on our credit card (back when we only had one, lol) and it worked for us. We got a great interest rate from our CU and were able to pay it off without incurring any more credit debt.

[CreditInspired]

IMHO, I would first get both your and hubby's FICO scores from CCT for $1 for a 7-day free trial offer. You will each need to subscribe and then cancel on or before Day 7. Then, I would see if I prequalify for the 21-mo 0% interest Citi Diamond/Simplicity Card. Even if an offer wasn't there, I think you should still consider applying if FICO scores are >680. Then do a BT of your debt to that card. IMHO, a $100 savings per month through SoFI for 3 years just doesn't knock the socks off my feet for me. Then, that's me. I would go that route but only after considering the Citi Diamond (can be PC) or Simplicity CCs first and the snow ball route second. GL to you on whatever decision you decide.

[wanttobeinthe700club]

I just applied for a personal loan with LC to pay off some credit card debt. At 18% it's a lot lower than the average of 24% to 28% with my cards.

[babbles]

Just curious, does sofi do hard or soft inquires and have that pulled your files so far OP?

[fig419]

We got the application turned in on the 6th and just got the call from Sofi (4 days). After asking the normal confirmation questions she put us on hold for a couple of minutes then said we'd be getting our funds in a few days! $13000 at 9%, $414/mo 36 months. Feels great to get this back under control. If they had denied us we would have tried out the suggestion from CreditInspired. Thanks for all your input!

[babbles]

Congrats!