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Old 09-30-2013, 07:35 AM   #1
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debt consolidation

Has anyone ever done a debt consollidation? I know it hasn't been that long since I posted about credit card debt, but I'm wondering if this would be a good way to go. Maybe it would keep my wife and I living week to week and never having much money left over after we pay our weekly bills? I know you guys are smart so I thought I would ask
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Old 09-30-2013, 07:39 AM   #2
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Can someone edit the title to be consolidation. Misspelled it.
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Old 10-02-2013, 07:27 AM   #3
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Going to go to the bank after work to talk to someone about debt consolidation. Right now we are paying about $500 in credit cards and thats not paying much over the minimum. Just tired of living week to week. I asked the lady at the bank to give me the best option as I know nothing
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Old 10-02-2013, 07:31 AM   #4
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Just be careful - a poorly managed debt consolidation can smoke your credit score. Realize that all your are doing is taking out a new loan in an amount large enuf to cover all your old debts and accounts, so you may end up paying FAR more in the long run.
Look at all the options very carefull before you do decide. Good luck.
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Old 10-02-2013, 07:42 AM   #5
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The lady and the bank said we may could refinance our home loan but not sure if we have enough equity since we've only been in our house for 4 years. She said if we did a equity line of credit to pay the credit cards off the interest rate is 7.75%. So it may not actually be a debt consolidation where it hurts my credit score b/c I don't want that.
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Old 10-02-2013, 07:48 AM   #6
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You need credit if you're going to buy something. Seeing your situation, I dont think you need to be buying anything. As long as you pay it off, your credit will eventually be better than it is now.
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Old 10-02-2013, 08:29 AM   #7
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Back when I bought my Tacoma in December of 2012 my credit score was 750. I don't think I have a bad credit score just not smart or been disciplined about buying. I guess I've had a wake up call. I'm not behind on any bills or been late.
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Old 10-02-2013, 08:31 AM   #8
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find a CC with 0% balance transfer fee and 15mo+ no interest and consolidate as much as possible.

chase slate is one of the few I know of with 0% balance transfer fee introduction.
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Old 10-02-2013, 08:33 AM   #9
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Then you dont need debt consolidation in my opinion If you haven't been late and have bad credit. Seems like you're doing good except for lots of bills.
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Old 10-02-2013, 08:40 AM   #10
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Yeah I just thought if we won't paying $500 in credit cards and one payment of about $250 and tear up the current cards then we would have $250 to put into savings or wouldn't need to use credit cards to buy groceries or necessities for our 20 month old daughter
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Old 10-02-2013, 08:42 AM   #11
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especially at a lower interest than our cards. I think the cards we have are 10%,9%, 17.99%, and 24.99%(wife's store card)
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Old 10-02-2013, 08:43 AM   #12
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How many cards are you currently paying on?
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Old 10-02-2013, 08:47 AM   #13
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Dont put the debt onto your house
Unsecured debt carry a higher rate since it is unsecured and teh creditor will get nothing in the event of default.

My reasoning in explaining that is to show you that if you put your debt onto your house and for some reason the payment is too much and your can afford it you will lose your house.

you stated you have a 750 score - so your credit isnt the issue - it seems that you are just trying to free up some money for other expenses or simply trying to pay down your debt faster.

say you have several credit cards and personal loans(unsecured debt)
take the total amount of debt and then apply for a personal loan (which should be at a lower interest rate then you have now) and in the notes section of the application you can list all the creditors in which you are trying to pay off.

If you want the lowest rate possible and feel it will not be a financial burden then yes you can do cash out against your vehicle as well if you have equity.

I would rather lose my truck and have a repo then lose my house and have a foreclosure.

both are not good to have but you need a roof over you head.

best of luck but I really would not talk to a branch or regular bank rep at any branch location. They very rarely have the skill sets to guide you properly.Its allways best to ask to speak to a loan processor or even better a loan officer after you have applied so they can see your credit and give you actual guidance versus advice.
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Old 10-02-2013, 10:10 AM   #14
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Quote:
Originally Posted by TJGARZA84 View Post
Dont put the debt onto your house
Unsecured debt carry a higher rate since it is unsecured and teh creditor will get nothing in the event of default.

My reasoning in explaining that is to show you that if you put your debt onto your house and for some reason the payment is too much and your can afford it you will lose your house.

you stated you have a 750 score - so your credit isnt the issue - it seems that you are just trying to free up some money for other expenses or simply trying to pay down your debt faster.

say you have several credit cards and personal loans(unsecured debt)
take the total amount of debt and then apply for a personal loan (which should be at a lower interest rate then you have now) and in the notes section of the application you can list all the creditors in which you are trying to pay off.

If you want the lowest rate possible and feel it will not be a financial burden then yes you can do cash out against your vehicle as well if you have equity.

I would rather lose my truck and have a repo then lose my house and have a foreclosure.

both are not good to have but you need a roof over you head.

best of luck but I really would not talk to a branch or regular bank rep at any branch location. They very rarely have the skill sets to guide you properly.Its allways best to ask to speak to a loan processor or even better a loan officer after you have applied so they can see your credit and give you actual guidance versus advice.
Yeah the lady at the bank is a loan officer. So you would do what she talked to me about yesterday on the phone with the personal loan at a rate of 7.75%?

We are currently paying on 6. 2 I didn't include in the above post b/c one is Best Buy and is under $200 and 0% interest for 6 months and the other is Care Credit and that balance is about $225. I didn't think these were big enough to put into the loan, or would you include them too?
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Old 10-02-2013, 10:17 AM   #15
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Hi wanna taco. Im a mortgage underwriter ( the guy who says yes or no). If you have equity in your house more then 20%. I would refi to do a cashout to pay down those cards. The interest rate on a mortgage is a lot less then the rate on those cards and you can write mortgage interest off on your taxes. If you are stuggling to live month to month this will help. Its not something you should do more than once. This would just be to help you get out of a tough spot. I see people do it all the time. Try to find a no closing cost program near you. Do not cashout to more than 80% of the value of your house because then you will have MI. Goodluck.
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Old 10-02-2013, 10:31 AM   #16
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If you have 0% I would stay there unless the monthly payment is too high or if you do not actually see yourself paying it off before the 0% rate expires.

For the record Im a Underwriter as well - been doing it over 12 years - consumer/small business/ commercial

Ive seen people do great things just using different type of loans to reduce debt and get out of hole and what not.

I would not put any unsecured debt onto my house though.
no offense to Mademan925

but the way I have allways explained it to people it that you can stop paying your credit cards and personal loans and the companies will probably try and collect a fraction of the debt or could simply charge it off and you wont pay anything (unless it is a very high dollar amount- they can place a judgement on your bureau in which case can be put as a lien onto your property - rare but can happen)

Now if you were to do the equity deal on your property you must pay that debt since it now has been apart of your mortgage and if you cant pay it you will be foreclosed on.

Now I can rattle your brain all day - but there are fine lines on many different level you can and cannot cross when it comes to debt and not paying.

But you seem smart enough and credit savy enough with your score to only listen to and take solid advise.
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Old 10-02-2013, 10:41 AM   #17
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No offense taken. I agree that if he were to default it would be worse if the debt was secured. But his monthly debt when spread over 30 years at 4.35 to 5% would be reduced a lot and would give him time to get back on his feet without missing any payments. If he thinks he may miss payments revolving debt wont hurt as bad so stick with that.
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Old 10-02-2013, 10:57 AM   #18
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I don't believe I have 20% of equity in our house. The interest rate is 4.5% right now and we currently have 6.25%. We went with this loan b/c it was 100% financing and didn't have to pay PMI(Private Mortgage Insurance). I'm basically looking a way to save some cash per month so we can save more than we are currently (which is hardly nothing)and not thinking about $$$ and bills all the time.
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Old 10-02-2013, 11:02 AM   #19
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Sorry man. You cant cashout over 85%. Keep making your payments and try to spend less. You will catch up.
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Old 10-02-2013, 11:35 AM   #20
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So you think my best option is to do personal loan at 7.75%?
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