Lending Club Pre-Approval

[selena]

I've been thinking of consolidating my credit debt for awhile. I thought I could manage it and continue to just pay them down but it's taking for ever as that little thing called life gets in the way. Anyway I have recieved my second pre-approval letter from Lending Club for up to $35,000 (i don't plan on asking for no where near that much) and I'm really considering it. I'm just nervous about how the process works and how much my monthly payments would be, how it would fit into my budgeting with rent, car pay, etc. I can't decide if it would be worth it. I tried applying for a loan through my credit union (same place as my auto loan) but was denied because my DTI was too high but my credit score allowed for my auto loan APR to be lowered to 4.4%. I'm only at about 21% utilization across all my accounts. Here's a list of my balances:

Discover It   $1348.99

Cap One     $552.12

Macys         $524.10 (closed account)

Freedom     $325.24

Slate           $235.02

Vic. Sec.     $154.67

Amex          $115.89

Citi              $100.01

The last few from Freedom down aren't so bad and I may not include them I haven't decided what would work best yet. I also have hospital bills I want to take care of but my health insurance just kicked in today so I should be ok with those. Would it be worth consolidating or no? I make about 2.5k a month my rent is around $900 and my car payment about $310 so I'm wondering would a loan hinder my process or help me in the long run. All APR's are in the 22.90 area for my credit card accounts. This decision came because I'm planning on moving, I live in the suburbs which is a little costly but moving to the city for me (I live in Illinois) is NOT an option as I'm closer to school, work, and my mother.

[Anonymous]

I must ask, is there a reason you have not BTd most of the amounts to your Slate card? With the 0% rate, this card is literally made for transfers and consolidation.

[selena]

It only has a $2000 limit so I felt like it would defeat the purpose, if I had bigger limits that would have been my first choice. I just needed another way to pay them off quickly because I'm closing most of them. I would say it felt like I was just shuffling debt but it's kinda the same idea with a loan.

[DaveInAZ]

Well, maybe BT your highest interest balances to Slate? And don't close the accounts, those open accounts with $0 balance will help offset the high utilization on Slate.

As I recall Lending Club lets yopu provide enough info for them to quote you a rate before you make a 'formal' app with a hard pull. I was getting those Lending Club pre-approvals regularly and had a $3k CC 0% balance that was about to turn into 22.9% interest, so I was looking for a $5k loan. Lending Club offerred me a 27% interest rate for a $5k "debt consolidation" loan. I was like %$#@!???? I don't have any debt with that high an interest rate, and I'm not about to take one.

I raided my IRA instead, gonna have it paid back by April 15 with new tax deductible contributions.

[dursty87]

---

@DaveInAZ wrote:

Well, maybe BT your highest interest balances to Slate? And don't close the accounts, those open accounts with $0 balance will help offset the high utilization on Slate.

As I recall Lending Club lets yopu provide enough info for them to quote you a rate before you make a 'formal' app with a hard pull. I was getting those Lending Club pre-approvals regularly and had a $3k CC 0% balance that was about to turn into 22.9% interest, so I was looking for a $5k loan. Lending Club offerred me a 27% interest rate for a $5k "debt consolidation" loan. I was like %$#@!???? I don't have any debt with that high an interest rate, and I'm not about to take one.

I raided my IRA instead, gonna have it paid back by April 15 with new tax deductible contributions.

---

+1.
You can check your rate via sp with lendingclub to see what they offer you.  If it's not appealing, I would definitely considering moving some of your higher APR balances to the Slate card and take advantage of the 0%.  No interest financing is where its at.

[dethkultur]

I got these preapprovals also, and almost tried it out.

You can log in to myinstantoffer.com, put in the max amount, and it will show you how much you can borrow and what the rates are (shows you several amounts and 3- and 5-year rates. Lower amount has lower rate.) You can choose what you want or drop it there.

All the APRs were more than my cards at the moment, plus, there is a 4% "origination fee," a rip off if you ask me. I passed.

Seriously, with your debt level I would tranfer as some people are saying, then swear off coffee, etc and just pay it off. You don't have much, and a loan won't help you pay it off faster.

[selena]

Thanks for all the advice. I think I'm going to wait it out a see how things go for me financially down the line.

[ranger2992]

I would take a step out of Dave Ramseys Money Makeover. You already have them ranked from high to low. Pay the min on everything but the lowest balance. Use they money leftover from paying the min, and use it to nuk the smallest balance card. Once it's paid off, hiut the next one on the list.

I didn't believe in everything in his book, but that process works well.

[Anonymous]

I would not suggest doing a consolidation loan - instead what I would suggest is if the Slate card has a 0% rate on balance transfers, use that. Transfer the CapOne, Macy's, Freedom, VS, and Amex balances to the slate card. You will have freed up at least $125 (assuming $25 min payments) just by doing that. The slate min payment will go up, but you'll still be way ahead. You should be able to pay off the Citi card in the next month, and you'll have somewhere in the range of $150 freed up, to attack the Dicover card balance with. No reason you can't have the Discover card paid off in another 6 months and by years end you could have the slate card below $1K

Also like the other poster said, don't close the account at this point, just sock drawer them. Let them boost your total credit limit until you get higher limits on your other cards.