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Poof no eyebrows
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Discussion Starter · #1 ·
Trying to consolidate my debt, went to get a loan but it was denied. I'm about 8 grand in debt. Any suggestions.
 

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Poof no eyebrows
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Discussion Starter · #4 ·
nope, no homeowner here, only thing I would have for collateral is my car, which I still owe on but would pay off with this loan, a catch 22.
 

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Code name: Felix
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Pay it off as you can.

By the way, it is a bad idea to get a loan on your house to pay off credit cards or debt, Custer, you should know that.
 

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That's a hard spot to be in. All I can say is get that $8000 paid off.

I went through that before I was married. Home equity is a great way to consolidate debt as I have found out. Lower rates and if you bought your house cheap like I did and it raised in value you cannot lose when it's small amounts like $8000.

Don't go looking for one of those consolidation loans from a ripoff place either. Their rates are sky high.
 

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DADDY WARBUCKS
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aviator said:
Pay it off as you can.

By the way, it is a bad idea to get a loan on your house to pay off credit cards or debt, Custer, you should know that.
Better than the alternative if you have learned your lesson and the property is appreciating rapidly. Plus, the interest paid is probably deductible.

But I would agree, it is a last, desperate move.
 

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Poof no eyebrows
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Discussion Starter · #8 ·
I just talked to a credit union, they said thir rates are 7.99 percent and go up depending on your beacon score. Dumb question what's the beacon score? is it the same as your credit rating.
 

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Code name: Felix
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Yes, it is the same as the cradit rating.

Custer, it depends on the alternative. He won't go to jail for not being able to pay a debt, he may wind up in the bottom of the bay with cement shoes, but that's a different story.

But a loan, mortgage or line of credit with your house as a collateral means a primary lien on the house, if not satisfied, you lose the house, A credit card bill, if not paid, you only get a bad credit rating.
 

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DADDY WARBUCKS
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It is your credit score. The higher the number the better credit risk you are.

Better scores mean you get the loan and at a decent rate.

I think 800 or 850 is the highest. Anything, IIRC around 650 or less is trouble.
 

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Custer said:
Better than the alternative if you have learned your lesson and the property is appreciating rapidly. Plus, the interest paid is probably deductible.

But I would agree, it is a last, desperate move.
It's not so bad if you're only taking a small percentage of the equity out of your home.

It's the folks who take out 100% of their equity... or even worse those folks who get suckered into borrowning 125% of their homes value who are begging for trouble.

Bottom line... if you use your home's equity... use it wisely and only after you've cured what necessitated borrowing against it in the first place.

Regarding how to climb out of debt... consolidate to the lowest rate card. Pay minimum on all but the highest rate card... pay as much as you can on the highest rate card... and so on... and so forth.

Unfortunately... no magic bullet here... just consistant dilligence and stewardship.

Want to speed things up... get a second job... the only real difference to output comes from input.

Lynch
 

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The best way to pay off debt is:
Prioritize debt by interest rate. Pay the highest rate off as quickly as you can without not paying other things(make minimums on those for the time being), or doing without basics like food and clothes.
Once the highest interest rate debt is paid, take the money you were paying on that debt and plow it into the next highest debt along with what you were paying before. You will find this one goes faster. Then when it's paid off, take the amounts you were paying for both of those, and plow into the next debt, along with what you were paying to begin with. Repeat.
Soon you will find yourself out of debt (at least high interest debt) with squeaky credit. This technique is called "Snowballing" and it takes discipline, but is worth it.
Oh, and destroy all but one of those cards!
EDIT: Transferring balances between the cards isn't always a great idea. It does show on your report, and can actually make things worse as other creditors may jack your interest rates on the "Low Rate" cards. Credit card issuers check your credit score on a regular basis and what you do with one account can affect what happens to others. No, it's not fair, but neither is %22 interest.
 

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Poof no eyebrows
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Discussion Starter · #14 ·
Owing 8 grand when your trying to get back to shool sure seems like it is aviator lol. Well I think I'm pretty much screwed, I think my credit score is around or just below 500.
 

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klauss said:
Owing 8 grand when your trying to get back to shool sure seems like it is aviator lol. Well I think I'm pretty much screwed, I think my credit score is around or just below 500.
Follow the plan above, young Jedi, and your credit score will improve.
 

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8k isn't all that big of an amount.

I could loan you the money, at say 29% interest with your wife and daughter as collateral. ;)

Actually, right after we had our daughter we were about that deep in the hole and what we had to do was live like we were college students for the better part of the year and live exceptionally lean. No eating out, no movies, no beer, no fun. For awhile we even did away with the cable TV because we both agreed that it was doing us no good and was eating up about $60 a month. We had to eat things like Top Ramen and Hamburger Helper. Some days I had to ride may bike to work because we couldn't afford to buy gas. It took us discipline and time but we just saved up the money and payed each debt off one by one, in cash, in one lump sum each. It was tough because back then we were barely making 18k a year with the wife still on maternity leave, and sometimes we'd have to go hat in hand to a parent or one of my brothers and beg for a hundred bucks to keep our power on on prevent eviction. We laugh about it now, because now that my investments have payed off, we dont have to worry about money anymore, but we will always remember the time when we had to check under couch cushions for money just to buy diapers or food.

It was worth it though because with the exception of the car payment and the mortage, we are completely debt free. I cant describe the feeling of finally paying off that last debt except that its about the same as shedding a 75 pound ill-fitting backpack after a 50 mile hike.
 

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Do you make a fairly low income Klauss? You might be elligible for some low interest school loans no matter what the credit issue is. My wife took out a loan when she went back to school for 3.8% and if you pay the interest up front every year it lowers the payback. It was a pretty good deal and we used some of that money to get out of debt as well at the time. Her ex-husband left her with $6000 in CC debt the deadbeat would never pay. He left her and charged a bunch of crap in a drunken stupor as well as stole a new car from a dealer. How they let him drive off in a new Mustang is beyond me when he had terrible credit.

On the equity loan, yes, you have to keep it very low or you will screw yourself up.
 

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some credit cards will offer 0% or low rates if you transfer a balance i think iam not sure but if so you could move your debt and lower the rate then marry a rich girl so you can buy another ak rick
 

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Poof no eyebrows
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Discussion Starter · #19 ·
Does getting someone to cosign make much of a difference?
 

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From the way I understand it if someone cosigns on a loan it can make a difference - but if you are late on a payment or miss a payment it goes against both you and them. In other words the bank will contact the cosigner for the payment or it could be bad for their credit.
 
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