It's been a while since I was last active here. I've been through divorce including a child custody battle in the last three years. Had to swipe my cards to pay legal fees because I didn't have enough liquid cash. It's been hell, but I'm glad I was able to pay for it in some way so that I could see my kid. There was a time when I wouldn't have had the ability to fight for time with my little one. Only silver lining there is that I'm grateful I at least had credit to use, in large part thanks to this forum from several years ago, so that my little one is with her dad for an equal amount of time.
What I need now is advice on a solid plan of action to pay off my debt in the healthiest, score boosting/maintaining way with the stats that I currently have. My debt to income is upside down. Help me get back to right side up the best way possible please. What are my best moves?
Income from two jobs: 52k
Installment loan (auto loan) : payoff $6610.01 - monthly payment $510.53 2.5% interest rate
Installment loan (student loans) : 29k - monthly payment is currently in forbearance not gaining interest
Revolving balances:
NFCU Cash Rewards apr 10.25% $ 20,841 / 24000 limit $421 min payment
Discover apr 18.25% $ 9756 / 18,000 limit $ 298 min payment
Snyc/Amazon Prime apr 22% $ 3634 / 6000 limit $118 min payment
Pentagon FCU apr 19% $ 3022 / 10000 limit $60 min payment
Capital One QS apr 22.90% $ 2932 / 4000 limit $87 min payment
Revolving debt total ~ 40k Monthly min payment total ~ $960
I have about an extra $600 per month to snowball with, on top of my minimum payments that I've been throwing at my lower balance cards. I've knocked out two of them so far.
Total debt including Installment & revolving ~ 70k
Vantagescore Experian, Transunion, & Equifax are all 677
Fico 8 Experian is 697, I don't know the other fico 8's
Very clean on all reports, just debt heavy
No late payments
No collections
No derogs
No new accounts
AAoA is 6 years 2 months
Only soft pulls but I checked my rates for a personal loans from two lenders to consolidate some revolvers.
Penfed preapproved for 11.25% on 20000
Discover Personal Loan prequalified for 18.99% on 30000
Would I be better off snowballing or avalanching, or consolidating some of these credit card debts? Should I try for another credit card with an interest free balance transfer offer and move the higher interest card debts to it?? If so, which one should I look into?
I do not own a home so HELOC is not an option.
Do I throw my extra money at that auto loan to pay it off first and free up that extra $510 a month? Even though my interest rate on that loan is 2.5%? Would it be wise? Once that loan is paid, I can also lower my auto insurance coverage to a lower amount and save another $80 on top of that monthly truck note being finished.
Give me some advice. I'm trying to get into a mortgage for me and my little girl as soon as I get out of this. I'm a professional firefighter and a military veteran. I have my VA loan certificate in hand for the day that I can afford to purchase a home.
I'm not giving advice but wondering if......Other's will chime in as to whether my thoughts are outlandish or not.
Thoughts:
Would making two pymts./month on these high int. credit cards knock down the interest a little and saving a few dollars in monthly interest on those cards? The payment would still total the same monthly amt. but divided by 2. (Thought #1) One partial pymt. early in the cycle and the second pymt. on or just before it's due date.
Also, wouldn't applying for anymore credit put OP at higher risk of AA by spooking current creditors? (cld's, closure(s), balance chasing?)...(Thought #2) ....perhaps those double pymts. could/would help stave off AA with enough time to get the %'s down across the board...forgot... (edit) plus throwing extra at them as OP mentioned there was some extra $ to apply somewhere.
Idk but glad you are current!
Thanks, yeah It took me several years to get to a totally clean report. I have to protect that now. I don't have any room at all to take on any more credit card debt or I'm going to be past the point of no return.
I would start by applying that extra $600/mo to the auto loan. at $1100/mo, pay it off in six months just for simplicity and assuming its a necessity.
after that I would use that extra $1100 per month and avalanche the credit cards. in theory you could have the auto, capital one, and amazon paid off in a year. pentagon and discover in year two. then finally nfcu. avalanche vs snowball are almost the same in this situation.
| apr % | balance | limit | min pmt | int $ | util % | |
| Capital One QS | 22.90 | 2932 | 4000 | 87 | 56 | 73 |
| Snyc Amazon Prime | 22.00 | 3634 | 6000 | 118 | 67 | 61 |
| Pentagon FCU | 19.00 | 3022 | 10000 | 60 | 48 | 30 |
| Discover | 18.25 | 9756 | 18000 | 298 | 148 | 54 |
| NFCU Cash Rewards | 10.25 | 20841 | 24000 | 421 | 178 | 87 |
| TOTAL | 14.84 | 40185 | 62000 | 984 | 497 | 65 |
the rough math on something like this is $8400+ in cumulative interest over about 36 months with $1584 in monthly payments ($984 minimums + $600 extra).
--- OR ---
if you are confident in penfeds pre-approval AND that you will not run the credit cards up again, you can take that $20000 personal loan and consolidate all cards except nfcu. the blended apr on those four cards is 19.78%. you will save money on interest, however, depending on the length of term you could end up with a slightly higher payment than the current minimums.
| apr % | balance | limit | min pmt | int $ | util % | |
| Capital One QS | 22.90 | 2932 | 4000 | 87 | 56 | 73 |
| Snyc Amazon Prime | 22.00 | 3634 | 6000 | 118 | 67 | 61 |
| Pentagon FCU | 19.00 | 3022 | 10000 | 60 | 48 | 30 |
| Discover | 18.25 | 9756 | 18000 | 298 | 148 | 54 |
| TOTAL | 19.78 | 19344 | 38000 | 563 | 319 |
| apr % | term | amount | pmt | |
| 36 month loan | 11.25 | 36 | 20000 | -657 |
| 48 month loan | 11.25 | 48 | 20000 | -519 |
| apr % | balance | limit | min pmt | int $ | util % | |
| Capital One QS | 22.90 | 0 | 4000 | 0 | 0 | 0 |
| Snyc Amazon Prime | 22.00 | 0 | 6000 | 0 | 0 | 0 |
| Pentagon FCU | 19.00 | 0 | 10000 | 0 | 0 | 0 |
| Discover | 18.25 | 0 | 18000 | 0 | 0 | 0 |
| NFCU Cash Rewards | 10.25 | 20185 | 24000 | 421 | 172 | 84 |
| 36 month loan | 11.25 | 20000 | 20000 | 657 | 188 | 100 |
| TOTAL | 10.75 | 40185 | 82000 | 1078 | 360 |
the rough math on something like this is $5800 in cumulative interest over about 30 months with $1584 in monthly payments.
forget about the discover loan because 1) from my experience they do not allow one to apply the loan towards any discover debt and 2) I don't love the rate.
I have no experience with student loans, so for now I would say leave that for last. worst case scenario some of that extra $600/mo could be used toward payments.
@iowe wrote:
It's been a while since I was last active here. I've been through divorce including a child custody battle in the last three years. Had to swipe my cards to pay legal fees because I didn't have enough liquid cash. It's been hell, but I'm glad I was able to pay for it in some way so that I could see my kid. There was a time when I wouldn't have had the ability to fight for time with my little one. Only silver lining there is that I'm grateful I at least had credit to use, in large part thanks to this forum from several years ago, so that my little one is with her dad for an equal amount of time.
What I need now is advice on a solid plan of action to pay off my debt in the healthiest, score boosting/maintaining way with the stats that I currently have. My debt to income is upside down. Help me get back to right side up the best way possible please. What are my best moves?
Income from two jobs: 52k
Installment loan (auto loan) : payoff $6610.01 - monthly payment $510.53 2.5% interest rate
Installment loan (student loans) : 29k - monthly payment is currently in forbearance not gaining interest
Revolving balances:
NFCU Cash Rewards apr 10.25% $ 20,841 / 24000 limit $421 min payment
Discover apr 18.25% $ 9756 / 18,000 limit $ 298 min payment
Snyc/Amazon Prime apr 22% $ 3634 / 6000 limit $118 min payment
Pentagon FCU apr 19% $ 3022 / 10000 limit $60 min payment
Capital One QS apr 22.90% $ 2932 / 4000 limit $87 min payment
Revolving debt total ~ 40k Monthly min payment total ~ $960
I have about an extra $600 per month to snowball with, on top of my minimum payments that I've been throwing at my lower balance cards. I've knocked out two of them so far.
Total debt including Installment & revolving ~ 70k
Vantagescore Experian, Transunion, & Equifax are all 677
Fico 8 Experian is 697, I don't know the other fico 8's
Very clean on all reports, just debt heavy
No late payments
No collections
No derogs
No new accounts
AAoA is 6 years 2 months
Only soft pulls but I checked my rates for a personal loans from two lenders to consolidate some revolvers.
Penfed preapproved for 11.25% on 20000
Discover Personal Loan prequalified for 18.99% on 30000
Would I be better off snowballing or avalanching, or consolidating some of these credit card debts? Should I try for another credit card with an interest free balance transfer offer and move the higher interest card debts to it?? If so, which one should I look into?
I do not own a home so HELOC is not an option.
Do I throw my extra money at that auto loan to pay it off first and free up that extra $510 a month? Even though my interest rate on that loan is 2.5%? Would it be wise? Once that loan is paid, I can also lower my auto insurance coverage to a lower amount and save another $80 on top of that monthly truck note being finished.
Give me some advice. I'm trying to get into a mortgage for me and my little girl as soon as I get out of this. I'm a professional firefighter and a military veteran. I have my VA loan certificate in hand for the day that I can afford to purchase a home.
1. If your goal is just to get out of debt, then I would just snowball.
2. If your goal is to get in the best possible shape for mortgage approval, I would take out the 11.25% loan and use the 20k as follows:
- 9,000 NFCU Cash Rewards
- 3,634 Sync/Amazon Prime
- 3,022 PenFed card
- 2,932 Capital One QS
- 1,412 Discover
Getting NFCU below 50% and zeroing out 3 other accounts will give your mortgage scores a nice boost.
Don't waste any of it on your installment loans; that won't help your scores at all.
If it were me, I would take the loan from PenFed and snowball from the ground up. Keep the Penfed credit card in your pocket for incidentals (make sure it gets paid every month) and sock drawer the rest. Put the 20k from Penfed as follows:
NFCU Cash Rewards 20,841
Discover 9756 (Pay 3802, remaining balance is 5954)
Car 6610 (Payoff) (I say pay off the car as that will free up $510/mo to go after the credit cards)
Snyc/Amazon 3634 (Payoff)
Pentagon FCU 3022 (Payoff)
Capital One 2932 (Payoff)
Now you have $775 plus the current minimum to attack the remaining Discover and NFCU. I didnt add the $600 that you said you had for snowball since the 20K from Penfed will need to be paid....whatever you have left from that payment, put it towards Discover. Discover should be paid off in 7-8 months (rough estimate), thus giving you an additional $1073 to put towards NFCU in addition to the $481 you are already paying.
This should put your credit card debt to 0 in about 24 months. Forget about the mortage right now, (take the savings from having no credit card payments and put it towards down payment or wipe out the Penfed loan (thats what I did)) the scores will fix themselves once you pay off balances. Once you pay off the max you can pay off with your 20k, your scores are going to take a big jump. I was 30K in the hole last year, did the loan to pay them off, and I got huge jumps in my scores.
Make sure after you get through this that you pay off your credit cards each month. I personally use AZEO, and that balance is paid each month so my cash rewards go into my savings account instead of towards interest rates. It's a great feeling to have all that high interest credit card debt gone.
Good Luck!
Thank you for your time drawing that gameplan up. 
That's basically what I was considering. My objective is to get the hell out of the debt moreso than get into a mortgage, the mortgage is just my secondary objective. I'm just trying to accomplish this as smartly as I can with the options I have. With my relatively low income, I have to be debt free essentially to get approved and realistically afford a decent home and still be able to purchase essential things.
Just for the sake of knowing, say I opt not to get the Penfed loan and go at it all with snowballing from the ground up. Would you start with the lowest balance card first, or would you start by paying the auto loan off first and then go after the cards?
Thanks for the advice.
My higher interest rate cards are essentially the same cards with the smallest balances. So, I would pay them off in the same order whether going for smallest balance first or higher APR first.
I should've added earlier, I went to the apps and either froze all my cards or deactivated them. I've been living cash only for the last month. I recently paid a couple of other low balance cards off just to get some low hanging fruit first. I have the discipline to stay the course as far as card payoffs.
I'm mulling over paying the auto loan off or not, to free up the
extra cash sooner to throw at the cards. Potato potahto, tomato tomahto.
Wondering if it would save me time or money to get debt free by paying that auto loan off now or to let it finish out as currently scheduled, which would be about 13 months I believe.