Getting another loan to pay off debts early - Page 2

Missystuy · 07-29-2007, 06:27 AM

Yah your post was confusing me as well. I suggest calling the cc company and see if there is a plan you can work out with them, maybe lower interest or whatever till its paid off. Recently Citicards worked wiht me, they charged me 0% interest for 6 months and a $10 minumum payment. I HAD to have the card paid off in full by the end of the 6 months to keep my acct in good standing. They froze the card so that I couldn't use it in the time I was paying on it, but it worked. I only had the finance charge tacked onto my bill every month and I got it paid off in 6 months.

newlywed0610 · 07-29-2007, 06:31 AM

I would suggest NOT getting another loan. Try to get dh onboard with the Financial Peace stuff. Follow Dave Ramsey's baby steps. They work!

master01 · 07-30-2007, 04:46 AM

One word of caution if you take any kind of loan to pay off your debts: Once your debt is paid off, you have to be vigilant about not running up your balance again because you still will have big loan payments to make.

If you're having chronic trouble paying off your credit card debt, it may be time to consult a debt counseling service for help managing your finances in the future.

desertmom · 07-31-2007, 04:47 PM

One note - if you have less than a year on any of these loans, believe me, any interest you save by paying off early will be minimal. They get the most interest right up front on loans, when you are least likely to pay them off - that's how they make their money. If it's not on your statements, you can ask how much is going to principal and interest each month. Credit cards - different story - it's revolving, so they get their interest based on the balance - that's why ccs are the more expensive options.

Karol · **What is the cost of this new loan?**

What is the cost of this new loan? They usually cost about $300 for an amount of about $7,000 (that would be close to 5% of your total debt). What is the interest rate on the new loan?

Now, what is the difference between what will be paying in interest over paying off your debts as you are currently doing versus the cost of the new loan plus the interest you will pay on it over the length of time it will take to pay off? Determine which option is cheaper and/or faster.

For your amount of debt, the cost of a new loan plus the interest you will pay on the loan will most likely cost more than the interest you are paying to just pay off what you have now highest debt first with minimum payments on the lower interest rate debts. This is due to the fact that you have relatively low interest rates on your debts and have less than a year to paying off everything. Due to the short length of time you have to finish paying off everything, look at the cost of the new loan carefully, it might be cheaper, it might not.

I just had a credit card I NEVER activated charge me two late payments and bump my interest rate up to the default rate of 32.23%!!!! I never even used the card!! However, that default rate is what people pay who have lousy credit scores. You are currently paying relatively low interest rates on your debt. That is why I think you need to add up all the costs of the new loan carefully.

Your husband is trying to find a faster cheaper way to pay off the debt and that is good. He is open to looking at alternatives to getting out of debt faster. That is a good thing.

Also, have you considered having your husband's car evaluated as to what is wrong with it (could be just the starter or something else not too major) and looking at the estimate to fix it versus what getting a different vehicle will cost? Know what you are actually dealing with regards to car repair. Sometimes it is better to replace the car and sometimes it is better to fix the car you have.

It sounds like you two are on the same page with wanting to be out of debt (as much as possible) and are working together to accomplish your goal. That is a good for your relationship and your marriage.