@TrueGeminiNC wrote:
@NRB525 - my last Discover CLI was probably about a year ago. The new loan is with my credit union. The rate for 15K (max debt consolidation loan amount) is 8.99%. I am also considering pledging 5 - 10K of my savings account as collateral to increase this amount.
I am taking time this weekend to really focus on reducing my debt load. On the surface things do look terrible. But, when I consider income + savings vs. wasteful spending - things aren't so bad. Hence why my initial inquiry was focused on rebuilding my score vs. paying down debt.
I also have the option to stretch the loan out for 5 years. But, I made the concious decion of 3 years. I am scheduled to meet with the loan officer at my credit union on Monday to discuss my final strategy and if I wante to take advantage of the option to pledge money in savings to increase the loan amount.
Ok, that's an excellent loan rate. Do you have to decide at the outset whether to pledge any amounts? As you pay down the loan, are those pledged funds freed up? One way to look at pledging the savings is, you aren't earning anything on the savings right now. By pledging to get a loan at 9%, you are "saving" the difference between what you pay off at 15% - 19% and the 9% you pay. That gets a little more complicated if you can get a 4.99% from Discover, and a 4% BT from BofA, but it also potentially relieves the high utilization that would result on those cards.
So my modified suggestion is, max the loan at $25k if you can, adding pledged savings. Pay off Delta Gold, Discover, BofA, and the Citi LOC comletely, pay $7k to the PRG.
Try the Discover CLI Request after you get Discover paid off. Use the Discover BT offer to move the remainder of the PRG, and $1k from the TY Premier, to the Discover BT.
Use a BofA BT to move $1k from the TY Premier.
The reason for leaving some on the TY Premier is, the Discover and BofA you want to pay down fastest, because they turn into a pumpkin sooner. Once you get Discover or BofA paid down to zero, then carve more off the TY Premier to speed that one down as well.
Once you get the TY Premier, Discover and BofA zeroed ( or practically there if you are on a last BT offer to zero) then lean on the CU loan to take care of that one.
Check with AMEX whether the Delta APR can be reduced. Read up on the AMEX 3X CLI request option to grow the CL.
Check with Discover whether you have any APR offers. I called late last year to ask about an APR reduction, and they offered 12 months with 0% APR on purchases. If you get this, then dining out in Q2 will be 5% cash back if you use the Discover, and no additional interest cost, though you should pay those new charges by the payment due date anyway.
