Help. Can't seem to get a consolidation loan.

flippy1234 · ‎05-22-2017

Hi, I've tried applying a few places for a consolidation loan and the only place that approved me was Avant, with a rate of 32.84% which is higher than my credit cards and seems crazy and not worth it, also only for $15k

Total CC debt: ~$33k

Min payments are ~$800/month

Fico Score: 647

Income: $110k

I have ZERO late payments on my account, just bought a house about 6 months ago, so my credit report is squeaky clean after going through the mortgage approval process. The only thing hurting me is my extremely high utilization.

I have no military affiliations, does anyone have anywhere they would reccomend on getting a loan?

Thanks!

Anonymous · ‎05-22-2017

@flippy1234 wrote:
Hi, I've tried applying a few places for a consolidation loan and the only place that approved me was Avant, with a rate of 32.84% which is higher than my credit cards and seems crazy and not worth it, also only for $15k

Total CC debt: ~$33k
Min payments are ~$800/month
Fico Score: 647
Income: $110k

I have ZERO late payments on my account, just bought a house about 6 months ago, so my credit report is squeaky clean after going through the mortgage approval process. The only thing hurting me is my extremely high utilization.

I have no military affiliations, does anyone have anywhere they would reccomend on getting a loan?

Thanks!

Which other places have you tried? Are you a member of a credit union? If not, I highly recommend being a member of a credit union because they are more people focused. If even denied at the credit union, a lot of times they will be able to work with you or at the very least put you in contact with a loan officer. PenFed is very good with personal loans.

I have to ask....$110K annual income and $33K in credit card debt. What happened? Also, with $110K income I would think it would be possible to pay off the debt on your own. I am not bashing you or trying to be insincere, but wondering how this happened. You don't have to answer I am just curious. Obviously if you live in San Francisco, Los Angeles or NYC $110K isn't very much.

Can you tell us how this debt is spread and the APRs of the cards? The reason I ask is because you may be able to dig yourself out of this without taking out a loan. For instance, if you have 5 credit cards with balances of $2,500, $5,000, $7,500, $8,000 and $10,000 I would recommend paying off the $2,500 and $5,000 cards first; meaning throw the most money at them. That way, once you get the "smaller" balances paid off, then you can focus on the larger balances. It kind of gives you a feeling of accomplishment to get those out of the way to work on the larger balances. And, at that point, by reducing overall debt, you may be able to qualify for the consolidation loan or even a balance transfer with a low or no APR offer.

flippy1234 · ‎05-22-2017

The $110k income is recent. 3 years ago I was only making $60k, so more than 1/2 of the debt was from before I got a better job. The even worse part is that doesn't include my husbands income, however he works for himself and he can go from 0 income one week to making $2000 the next, it is all over the place, which makes it really really hard to budget. This year has been slow so far.

I'm embarrassed that I don't really have a good excuse for racking up debt, other than having 4 kids and just being irresponsible. We built/bought a house last fall and that drained our savings, and we used credit to buy new appliances and furniture after we moved in because we had nothing left. A big chunk of our money also goes to medical expenses every month, my insurance is expensive and crappy and my husband is a type 1 diabetic and has kidney disease, so with Dr. appointments and insulin.

The debt is split over 13 different credit cards, with balances ranging from $800 (the lowest) to $6600 (paypal credit, highest). Most are around $2k-$4k balances. Also. I did the math wrong before. Its $37k and closer to $1k a month minimums. sigh. I don't even know all of the APRs, but pretty sure they are all 15%+ with maybe one of the newer cards having a 0% that will run out before I can pay it off anyway.

Thanks for the advice. I need to sit down and figure out a better budget and plan exactly how much "extra" I can throw at these balances each month, its just so overwhelming with SO MANY CARDS. They are all just on autopay and I just try not to think about it.

I'm also putting 7% (before company matching) into my 401k, but I'd rather not mess with that at all right now.

Anonymous · ‎05-22-2017

Ah, understood. Unfortunately it is easy to get into debt. I remember always wondering how people balooned in weight until I gained 20 pounds without realizing it the same thing can happen with debt.

It actually seems like yours and the Mr.'s situation can be worked on. I am glad to hear that your balances are relatively small per card. I do suggest sitting down and looking at the balances on each card and knock out those small balance cards first. You will feel so much better sending off the payment in full on those smaller guys so that you can move forward towards the larger balances. 13 cards will turn into 11 then 10 and so forth. And at some point you can re-evauluate the situation; either qualify for the consolidation loan or get a balance transfer completed.

It sounds like you are overwhelmed which I think is normal, but with a little persistance and reward (seeing a $0 balance) it will help you feel better about it.

Try not to dwell on the debt too much. Set aside time per week to review your progress and the plan for the month. But in the meantime, do not think about the debt other than that time each week; enjoy your kids and try to find something positive each day. Life is too short!

PS please please please do not reduce your 401K contribution.

Anonymous · ‎05-23-2017

With your combined income, the honest answer is you have to just force the family on a strict budget. Even if your husband's income fluctuates from $0-$2000 weekly, there is no reason that you can't re-budget your $2000-$4000 weekly income into categories, cut the unnecessary spending entirely, and pay that debt down by APR only. Don't "snowball" low balances, just pay the highest APR with whatever is left after paying minimums.

Between you and your husband you're bringing in anywhere from $8000 to $16000 a month. That debt can be wiped out in 6-12 months if you pay it down and SD all your cards except for rewards cards that you know you can PIF new balances from.

A loan isn't going to fix things. Most people who consolidate credit cards will end up re-maxing their cards and still have the loan balance to pay.

Anonymous · ‎05-24-2017

Have you tried some place like Payoff? Their customer service is pretty amazing and the free tools they offer are quite helpful for understanding credit and what lenders look for in applicants. (I don't work for them). I've also heard good things about Upstart, but I have no experience applying with them.

The high uti will do it as well as debt to income ratio. I recently applied for a loan for $15K and discovered some erroneous late payments on my report that I'm taking care of. Even after those are handled, I'm sure I will face a high interest rate because of how much credit I'm using. I would suggest putting as much as you can towards lowering your usage. Some places can be very finnicky about inquiries as well. But still, with your combined income, it's possible, depending on your living expenses, that you don't even need a loan if you're strict with your budget.

rmduhon · ‎05-26-2017

I'd suggest making a budget using just your income and when hubby has income throwing all of that on the cards. Start with the smallest card first and work your way up. As more cards get paid off the less you'll feel overwhelmed.