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Personal Loan Help

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Personal Loan Help

 

Hello everyone,

Long time lurker but first time poster here, looking for a little help on where to go next to achieve my goals. Here is a little backstory on what I've done so far. 

I Should have Filed BK a long time ago but was too proud/stubborn to do so. I was absolutely buried in payday loan debt, buried to the point it took almost all of my paycheck to pay them. I basically ran credit cards up to get by. I took out a a 11k loan @ 25% earlier this year to knock out the payday loan debt and tackle some of the CC debt. I know the interest rate is ridiculous but its better than the payday loans and equal to or lower than the CC rates i was paying. I was able to get back on my feet with this loan and now actually have money to pay my bills and then some.  My goal is to get my score up high enough to secure a much lower interest loan to get rid of this crazy 25% loan 

Here is what i have going on currently

668 FICO Score 

the 25% loan has right around 9.5k left on it. I took this loan with a score in the 580s. It is a secured loan. 

38% utilization. A few cards are still over 80%, and paypal unfortunalty just reported at near maxed out. 

I have several 30 lates from a mortgage on the report ranging from 1.5 years old to 6 years old.

No other derogs. 

Im looking to get a personal loan to get rid of the 25% loan. Ive done a few of the prequals online and have found some bettter offers than i currently have but nothing that makes me want to go for it.  I have yet to try my local credit union which will be my next stop. Do you think this is possible with my current situation?


I have a little bit of money i could pay some of the credit card debt down with, To try to boost the score a little bit would it be better to get the cards with super high utilization paid down a bit or have more cards reporting with 0 balance? Ive already tried CLI's and im getting nowhere with that. 

Any and all help would be appreciated. 

Message 1 of 19
18 REPLIES 18
Super Contributor

Re: Personal Loan Help

If you can pay down some of the super high utilization on individual cards, that will help.  A lot.

 

668 isn't a bad score, but it isn't a great one and in my opinion, you are at best a borderline approval for an unsecured personal loan. 

 

Reducing the utilization on specific cards might get you to a 700 or so Fico score, and you'll have more options available.

 

I absolutely agree with you that a local CU would be a great place to have this conversation.... some of them will show you what interest rates you qualify for based on your Fico score. 

 

Good luck!  Smiley Happy

12/01/19 Fico 8: EX 732, EQ 732, TU 755.
11/08/19 Fico 9: EX 733, EQ 740, TU no idea...
Zero percent financing is where the devil lives...

Firmly in the garden until the next pre-approval arrives!
Message 2 of 19
Established Contributor

Re: Personal Loan Help

I agree I wouldn't until you raise it up more have you asked the people you got the loan with about refinancing (the apr?!)     I know some loan places that after having the loan 3-6 months they give you the option to refinance the apr part but if it is lower than your CC as well then that's pretty good ....side note unsecured personal loan often come with high apr as well and depending on the CU may be harder for you to get still even with lower apr without raising your score first (knocking down the utilization) 
















Message 3 of 19
Member

Re: Personal Loan Help

I do have a preapproval through Marcus. The rate still sucks but its better than what i have and would save me around 2500 throughout the life of the loan.  Im trying to find something a little better though.

The loan i currently have is secured with a boat with mechanical issues that i can not fix at this time.. So getting rid of the secured loan will also make it possible to get rid of the boat which means i lose an insurance bill and can sell the boat which as is will bring me 3-4k

Message 4 of 19
Valued Contributor

Re: Personal Loan Help

You may not want to use the new personal loan to pay off the secured loan just yet.

 

Use it to pay down your credit cards which would then increase your scores substantially, THEN you can shop other personal loans with your improved scores to pay off the two that you have.

 

Then sell the boat and start snowballing all of your debt with the proceeds.

 

Word of caution - if they're not already, sock drawer your credit cards and don't consider using them until you're out of this mess.  This is a very delicate plan that can easily go haywire if you keep incurring new debt.

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU Cash Rewards/NFCU Platinum/PenFed Power Cash Rewards/PenFed Pathfinder AMEX/Citi Costco Visa - $96k total revolving
EQ/EX/TU: FICO 8's November 2019: 696/679/668, 14% utilization, AZE2 (w/ those 2 cards reporting 30% util), INQ's: 4/2/1
Message 5 of 19
Member

Re: Personal Loan Help

Not a bad idea to take a loan to payoff the cards. I’ve been so focused on getting rid of that loan I didn’t even think of that.

Maybe I’ll see if they’ll give enough to cover both the loan and the cards.

As for sock drawing cards, they all are except one. The one I use for the rewards and treat it as a debit card and PIf each week.
Message 6 of 19
Member

Re: Personal Loan Help

Everything that was above 80% has been paid down under that mark.

Unfortunately I missed 1 of the cards statement dates by a day so will have to wait until the end of next month when it reports
Message 7 of 19
Super Contributor

Re: Personal Loan Help


@Rogerk08 wrote:
Everything that was above 80% has been paid down under that mark.

Unfortunately I missed 1 of the cards statement dates by a day so will have to wait until the end of next month when it reports

That's great progress!  Yay you!

 

It also gives you another 30 days to work on it.  Smiley Happy

 

Fico scoring has utilization thresholds built into the revolving credit usage category.  8.9%, 28.9%, 48.9%, 68.9%, and 88.9%.

 

If you can get all of your individual accounts under 68.9%, you'll see a nice boost in your Fico score.  Smiley Happy

 

Good luck!

12/01/19 Fico 8: EX 732, EQ 732, TU 755.
11/08/19 Fico 9: EX 733, EQ 740, TU no idea...
Zero percent financing is where the devil lives...

Firmly in the garden until the next pre-approval arrives!
Message 8 of 19
Member

Re: Personal Loan Help

Quick update.

when i first posted i had a 668 score with 3 cards reporting over 88.9. All three of those cards are below that mark, one being under 68.9% I have also paid a few others off completely and paid  one or two others below their next utilization thersholds. 

My plan is to call my local credit union as soon as that last card reports around a week from now, hoping these changes gained me a few points and i can refinance some of it not all of my debt at a much lower inetrest rate.

Wsh me luck 

Message 9 of 19
Super Contributor

Re: Personal Loan Help

Good luck!

 

As you mentioned, be sure that the new balance has actually updated to the CRAs before you apply.

12/01/19 Fico 8: EX 732, EQ 732, TU 755.
11/08/19 Fico 9: EX 733, EQ 740, TU no idea...
Zero percent financing is where the devil lives...

Firmly in the garden until the next pre-approval arrives!
Message 10 of 19
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