Personal loan?

[emily15]

Hi everyone,

I have a lot of CC debt I’ve been working on. About half is on 0% interest that I’m trying to pay off before they expire and the other half is on high interest CCs.

I got a mailer for a prequal personal loan from Sallie Mae. I attempted to prequal with both Amex and discover with no luck so I decided to pull the trigger on the Sallie Mae app to see what the options were. They hp EX which was at 691 (now 690) and came back with a rate of almost 18% for a 36 month loan .

I’m now undecided as what to do since I would be getting the loan to pay off CCs with interest rates from 20-29%. However, the rate on the loan is not that much lower so now I don’t even know if it’s really worth it.

I’ve read that a “personal finance” company loan like Sallie Mae can end up hurting your credit? Is this considered the same as those payday lending companies?

I have a lot of new accounts and my aaoa is like a year so I’m worried another new account will hurt even more.

Please don’t eat me alive here - just looking for some insight maybe other have been through similar situations. I also don’t want to post my entire credit profile sorry.

Thank you in advance!

[Brian_Earl_Spilner]

If it's listed as a consumer finance account, yes it will hurt your credit, but I highly doubt this would be as you aren't financing anything. While it's a high interest rate, it's still lower than if you did nothing. As long as it doesn't flag as a CFA, I would take it and refinance 6 mos to a year down the line.

[emily15]

Is this something I can ask them? How would I find out (before deciding)?

[Anonymous]

How much are we talking here?

[emily15]

Asked for 9k and approved for it but thinking of taking 5-6k.

[emily15]

Oh and total cc debt is about 15k 😩😩

[Anonymous]

I personally don't think it's worth it . . and know that I say this having done the same thing dozens of times before my BK and it never really fixing anything. They were just temporary band aids that I thought would fix things that never improved my financial health (and typically resulted in me ending up with more and more debt.)

The key really lies in your budgeting and spending and fixing the issues there is what is going to eradicate your debt once and for all.  

If you can stop using your CC's, boost your income and trim your expenses, you'll start making real progress on this debt. Once your utilization starts coming down, your profile will improve greatly and options will potentially open up to you to actually get all of this debt in one place at a decent rate. Until then, I think the piecemeal action of moving part of the debt to another crappy high interest rate loan does you no favors.

[emily15]

That’s what I was thinking as well. Maybe I just needed to hear it from someone else. Thank you!!!

[shoegal]

My suggestion would be to try with a local credit union since they usually offer lower rates.

[Anonymous]

I wouldn’t get a loan because based on your post I feel that a good solid realistic budget and the snowball method of paying off debt would help you more.