Debt Consolidation?

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iKapuniai
iKapuniai Posts: 594 Member
in Chit-Chat
I'm all out of resources and didn't know who else to ask about this, so I figured I'd post it here and see what happened lol

I'm trying to figure out how to consolidate my debt. I have about $6,500 left of my private student loans, and about the same amount ($6500) in credit card debt (long story - not my fault! lol). I notice my interest/APR or whatever for my student loans AND my credit cards is about 13%... I want to know if there's a way I can consolidate everything into ONE monthly payment, hopefully with a lower interest rate or APR. I'm clueless when it comes to stuff like this.

I've called a couple banks and asked them about a personal loan that could help me, but the ones I called also offer student loans, so they said they couldn't help me with those... must be a competitive sort of thing... anyways... anybody know anything about this kind of stuff? Is a personal loan a good way to go? Know of any US banks that would offer a loan that could pay off both student loans AND credit debt? Not only that, but for a lower interest rate or APR? My credit score is currently 720, so that should help a little, right? Blah! So lost, but at 13%, I will NEVER pay off these loans!

Anyways... if anyone has any advice, experience, resources, etc... that would be greatly appreciated.

Thank you all in advance.

Love and Alohas,
Ihilani Kapuniai
«1345

Replies

  • xraychick77
    xraychick77 Posts: 1,775 Member
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    probably not....even with decent credit, its very hard to get any credit card company to extend a 12000 dollar limit. which is basically what you'd be doing..if you really want to consolidate loans, i'd keep trying the bank route. although i dont know what sort of interest rate they'd extend. probably not much better that what you have now. its the economy. if you cant get a personal loan, then your best bet would be to try to call your credit card company and negotiate a lower interest rate. this however rarely amounts to anything. you can also ask them about principle payments in addition to your regular payments that include the interest..the lower you get your principle the less interest you'll end up paying. i do this with my car.

    NEVER go with any of those tv advertised consolidation companies..they are a rip off..and demand a lot of money up front..and if you had that much money, you could use it to just pay off the loans.

    other than that..just keep paying them down..try to pay more than the minimal and make principle payments. i am not an expert, as i do not have any credit cards or student loans..if i cant pay cash for something (except car or house) then i dont need it. but thats just me.
  • laursey
    laursey Posts: 307
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    Do you have any assets, particularly a house? You could do a home equity line of credit. I'm in Canada and rates here are 3% locked in for two years. Nip it in the bud and get it paid off ASAP. If you continue paying the same amount in payments as you're paying now, you'll pay it off super fast! Also, remember you can always negotiate a lower interest rate. If the person you're talking to won't give it to you, talk to their supervisor.

    If you don't have equity in a home to use as leverage, call your credit card company and negotiate a lower interest rate. Just tell them you don't want to be at the 13% interest rate. It sounds so easy, but truly you can get a lower rate, you just need to ask and be persistant. If the person you're talking to won't do it, ask for a supervisor and work your way up.

    Good luck! And great job getting this organized and tackling it before it grows bigger.
  • BrienJD
    BrienJD Posts: 541 Member
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    I once looked into debt consolidation, but they wouldn't give me the amount I needed and what I could get was still at nearly 15%, I was going to lose either way. If you are trying to lower your payments you're going to end up paying more in the end. Just throw whatever you can at the debt you have and pay it off as quickly as possible.
  • mseraf713
    mseraf713 Posts: 29 Member
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    You could open a 0% balance transfer credit card. like an earlier poster stated, not sure if they would give you a $13 000 limit. Have you tried calling the credit card companies to see if they will work with you to lower your payments?

    Again, as someone else mentioned- do NOT go to a debt consolidation service. They will rip you off with extra fees and ruin your great credit score. I know that you feel like your in a hole, but alot of people out there would be thankful to only have $13K in debt!

    Finally, have you budgeted how much extra money you can put towards debt payments? You're going to need to live on a tighter budget for the next few months. Put your family on a budget, use only cash and track every single item you spend. I'm not sure what your current spending habits are, but if you can cut ANYWHERE (clothes, shoes, dining out, starbucks, entertainment, manis, pedis, cable, gym memberships) and put that extra money to debt payment. I know its hard to give up that stuff, but when people say things like "nothing tastes as good as skinny feels" I think "no pair of shoes makes me happier than a 0 credit card balance and money in the bank!"
  • Ocarina
    Ocarina Posts: 1,550 Member
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    I once looked into debt consolidation, but they wouldn't give me the amount I needed and what I could get was still at nearly 15%, I was going to lose either way. If you are trying to lower your payments you're going to end up paying more in the end. Just throw whatever you can at the debt you have and pay it off as quickly as possible.

    Exactly this. You will pay more interest in the long run because your payments are lower with interest eating more of the payment up.

    I think you should look into something like Dave Ramsey and start budgeting and plowing away at student loan debt. Get rid of it the old fashioned way. Just work hard on saving and spending. It is worth it.
  • Drenched_N_Motivation
    Drenched_N_Motivation Posts: 1,004 Member
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    Stop paying on those two credit cards for 6 months or so, find stuff you can sell of and get your self 5-7 thousand dollars cash. Then call your credit card companies direct and say listen, I have 3,900 dollars here and we can settle this debt right now and I bet they will take it. Do the same with the other company as well. Your credit score will take a hit for a year or so but it would probably drop less that 80 points. I did this 3 years ago with 7,800 dollars in credit debt, I paid 3,300 to one and 2,000 to the other. My credit score is around 730 today. Its not the traditional way to do it, but it beats taking 5 years to pay it off with all that intrest.

    Whatever you do though, do not go through a debt consolidation company.
  • MellowGa
    MellowGa Posts: 1,258 Member
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    Missing one payment on your Credit card bill will follow you for 7 years, my Advice is as follows...

    Attack your credit card debt first, pay the minimum on your student loans, you can check if you can Defer the payments for them, which some allow, also your Student loan interest are Tax deductable, credit card interest is not.

    First figure out how much you make a month, then set yourself a budget, figure out what you need to "live" and what is "disposable income" ie extra.

    Now for your credit cards, attack the one with the highest rate first. say your min payment is $100, instead of paying the monthly payment, send $200 each pay check, no month, but paycheck, set up a online bill pay with your bank, this will greatly reduce your interest.

    I also Recommend at the same time, if you do not have a savings account, set one up, and Place money in that account every check, say $100, my theory is "pay yourself first" so I stick $200 a paycheck in my savings account for a dream vacation to Bora bora in 5 years wih my wife, $200 a month for 5 years=$10,000, So while I am paying down our family debt, I am also saving for our dream vacation.

    Anyway, best course of action is to bite teh bullet and pay your credit cards off first, but the more you send, the better off you are.

    Stop frivilous purchases such as eating out, buying things you do not need. For us to go out to dinner (family of five) it is easily a $100 dinner, so when we "by pass" going out to dinner and eat at home, I take that "savings" and send it to a credit card company to help reduce our debt.

    Also another course of action is if you have a 401K currently you may borrow from it as a personal loan and pay YOURSELF back with Interest, usually the rate is 4-6%, I did this when I purchased our first house, it worked rather well.

    Best of luck, but some advice on here I would not follow, Credit is very important and will effect your life years down the line.

    Think of it as losing weight, being fisical discipline is the same thing as being Physically discipline, same course of action.
  • ninerbuff
    ninerbuff Posts: 48,704 Member
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    Stop paying on those two credit cards for 6 months or so, find stuff you can sell of and get your self 5-7 thousand dollars cash. Then call your credit card companies direct and say listen, I have 3,900 dollars here and we can settle this debt right now and I bet they will take it. Do the same with the other company as well. Your credit score will take a hit for a year or so but it would probably drop less that 80 points. I did this 3 years ago with 7,800 dollars in credit debt, I paid 3,300 to one and 2,000 to the other. My credit score is around 730 today. Its not the traditional way to do it, but it beats taking 5 years to pay it off with all that intrest.

    Whatever you do though, do not go through a debt consolidation company.
    Are you talking about the credit card company taking a charge off? If they do that, then that would show against your credit. And that follows you for 7 years. A charge off is a red flag for any loan company or bank. So I doubt that someone doing that would be better off in a couple of years.


    A.C.E. Certified Personal and Group FitnessTrainer
    IDEA Fitness member
    Kickboxing Certified Instructor
    Been in fitness for 28+ years and have studied kinesiology and nutrition
  • Drenched_N_Motivation
    Drenched_N_Motivation Posts: 1,004 Member
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    Stop paying on those two credit cards for 6 months or so, find stuff you can sell of and get your self 5-7 thousand dollars cash. Then call your credit card companies direct and say listen, I have 3,900 dollars here and we can settle this debt right now and I bet they will take it. Do the same with the other company as well. Your credit score will take a hit for a year or so but it would probably drop less that 80 points. I did this 3 years ago with 7,800 dollars in credit debt, I paid 3,300 to one and 2,000 to the other. My credit score is around 730 today. Its not the traditional way to do it, but it beats taking 5 years to pay it off with all that intrest.

    Whatever you do though, do not go through a debt consolidation company.
    Are you talking about the credit card company taking a charge off? If they do that, then that would show against your credit. And that follows you for 7 years. A charge off is a red flag for any loan company or bank. So I doubt that someone doing that would be better off in a couple of years.


    A.C.E. Certified Personal and Group FitnessTrainer
    IDEA Fitness member
    Kickboxing Certified Instructor
    Been in fitness for 28+ years and have studied kinesiology and nutrition


    Yes it is basically a charge off and is considered as earned income at the end of the year, and just because it stays on your record for 7 years doesnt mean your credit cant go back up for 7 years. Its a drastic decision but it is decisive. I decided to get out of debt fast and rebuild my credit insted of taking 4-5 years making minimum payments with a 1,000 dollars worth of intrest charges.
  • Lyadeia
    Lyadeia Posts: 4,603 Member
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    I recently paid off around the same amount of debt using Dave Ramsey's "Debt Snowball" method (I'm sure you've heard of it, even if it wasn't from him).

    I started off writing down all my debts in order from smallest to largest. (I had 3 major credit cards and a couple of store credit cards). I paid off the smallest first and then the next smallest and so on. I made regular minimum payments on all of the cards except for the one that I was concentrating on at the time. When it was paid off, I paid all the money that I was paying on that one on the next one + the minimum payment that I was making while keeping the others at minimum. So with each consecutive bill, I was paying more money on it than the previous. One by one they were paid off.

    I also looked into consolidation, but it didn't make much sense to me. In the end, I would have paid more because of the lower payments or higher interest rate. I also wasn't interested in borrowing against my house. And getting yet another credit card didn't interest me, because that was just more temptation for me to spend more money.

    And I agree with the above poster that mentioned "paying yourself." I also do this and my savings account is huge now compared to before, so I paid off my debts AND I have money in the bank. It's a great feeling to know that there's money there "just in case."
  • coliema
    coliema Posts: 7,646 Member
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    I once looked into debt consolidation, but they wouldn't give me the amount I needed and what I could get was still at nearly 15%, I was going to lose either way. If you are trying to lower your payments you're going to end up paying more in the end. Just throw whatever you can at the debt you have and pay it off as quickly as possible.

    Exactly this. You will pay more interest in the long run because your payments are lower with interest eating more of the payment up.

    I think you should look into something like Dave Ramsey and start budgeting and plowing away at student loan debt. Get rid of it the old fashioned way. Just work hard on saving and spending. It is worth it.

    ^^ I agree with both of them. & Dave Ramsey :love:, such a great idea! You really should look into him.
  • chrishgt4
    chrishgt4 Posts: 1,222 Member
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    Do you guys not get any 0% interest credit cards in America?

    Just take one of those out and transfer the debt. There'll be a charge to do this of usually like 3% but it's worth it in the long run. when it's nearly the end of the 0% period - try and find another to transfer it to.
  • grinch031
    grinch031 Posts: 1,679
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    Debt Consolidation programs are meant for people who are missing payments and have trashed their credit score. They are a bad deal so don't bother unless its a last resort.

    Try to get a new card with 0% intro rate and do a transfer if possible as others have stated. Otherwise just hang in there and put all your extra money towards paying down the credit card. Sell any assets that might help you out there as well.
  • Bahet
    Bahet Posts: 1,254 Member
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    I have no idea what sort of assets or income you have so the only advice I can give s very generalized. As somone else mentiond - student loan interest is tax deductible so work on paying dow your credit cards first. If you have a decent income and income to debt ratio try calling the bank and asking them to lower your interest rate. Check for a 0% interest rate card to transfer the balances. Just check for any hidden fees - sometimes it's not worth it. Cut out the extras. People already mentioned things like cable, eating out (a HUGE expense), etc but don't forget the little things. Unplug your TV, computer, other electronices when not in use. Adjust your thermostat up a degree or 2. Stop drinking soda. Buy generic.

    I'm a financial advisor and one of my big points is that I can save just about everyone around $5/day without drastically changingtheir lifestyle. Now, obviously, some people have already done a lot of changes on their own so they might only be at $1/day while others are so far out of touch with their financial reality that it might be $10/day. $5/day doesn't really sound like much but if you knew the mail carrier was putting a $20 in your mailbox every 4 days you'd be out there the minute she arrived on that 4th day. Plus, the little things actually add up faster than the big ones. $5/day is $1825/yr which is $18,250 in 10 years even without interest. If you do that starting at age 26 by the time you are retiring at 66 you will have saved nearly $75,000 - again with 0 interest. If you figure a modest 5% interest that amount changes to over $233,000.
  • Bahet
    Bahet Posts: 1,254 Member
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    Oh, and I highly recommend against intentionally doing charge-offs. That's pretty much legal theft IMO. You spent the money. You bought the items. Charging it off means you keep the items and everyone else gets to pay for it with higher interest rates and fees.
  • Drenched_N_Motivation
    Drenched_N_Motivation Posts: 1,004 Member
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    Oh, and I highly recommend against intentionally doing charge-offs. That's pretty much legal theft IMO. You spent the money. You bought the items. Charging it off means you keep the items and everyone else gets to pay for it with higher interest rates and fees.



    Yeah, those poor credit card companies. Dont knock it til you try it.
  • Shweedog
    Shweedog Posts: 883 Member
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    I did a debt consolidation loan through Citi Financial several years back. Maybe google them and apply online? And debt consolidation is not for people who have "trashed" their credit. Debt consolidation means just that, consolidating your debt into one lump sum so you can make one payment with one interest rate. I was able to pay off everything I owed at a much cheaper interest rate. Saved hundreds.
  • angieleighbyrd
    angieleighbyrd Posts: 989 Member
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    You can't consolidate student loans with other debt. You can only consolidate student loans with other student loans.
  • FitForeverAgain
    FitForeverAgain Posts: 330 Member
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    There we go - screw personal responsibility! Let all of the paying people in the land make up for you lack of self-control. Do the right thing, work a second job, get more hours, stop spending - and PAY YOUR DEBT THAT YOU INCURRED. Funny this comes up on a weight loss sight. Similar issue pours into so many people's bellies - eat all we want, but don't want to pay the price to get skinny. Everyone wants it fast and easy.

    And I know life is tough...suck it up. I've run 2 failed businesses, and started two more since. I was broke after the market fell apart. Guess what, I did whatever it took and I'm still paying back those debts. Why? Because it's money I owe. Have some pride and set an example. And we wonder why the country's in decline.
    Stop paying on those two credit cards for 6 months or so, find stuff you can sell of and get your self 5-7 thousand dollars cash. Then call your credit card companies direct and say listen, I have 3,900 dollars here and we can settle this debt right now and I bet they will take it. Do the same with the other company as well. Your credit score will take a hit for a year or so but it would probably drop less that 80 points. I did this 3 years ago with 7,800 dollars in credit debt, I paid 3,300 to one and 2,000 to the other. My credit score is around 730 today. Its not the traditional way to do it, but it beats taking 5 years to pay it off with all that intrest.

    Whatever you do though, do not go through a debt consolidation company.
  • threnners
    threnners Posts: 175 Member
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    Not to mention, if you use the assinine method described, you will owe the IRS big time on what you "settled" because they consider that to be income. Take it from someone who lost their tax refund because their stupid*ss ex spouse went this route.

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