I want to consolidate my debt, but need advice!

[brigden]

I'm in debt up to my eyeballs and I need to find a way to sort it all out. In total, I'm just under $14,000 in the red.

10,900 in Student Loans [6.25%] (70/month min. payment)
1,000 on MasterCard [18.4%] (20/month min. payment)
2,000 on Visa [17.9%] (60/month min. payment)

I pay $150/month in minimum payments.

I have no savings and live paycheque to paycheque. I wish I could afford to make more than the minimum payments, but after rent, utilities, food, etc. are subtracted I'm left with almost nothing.

Anyway, I know I should be talking with a financial planner, but I'm curious to know if any of you guys have been, or are, in similar situations. What steps have you taken to improve your finances. Is debt consolidation going to help?

Any advice is greatly appreciated.

 

[The Stigenator]

i heard lending tree now offers debt consolidation (lending tree or one of the other places).

I want to do it too.. im in the same boat as you.

 

[brigden]

Thanks, TGG. Anyone else?

 

[Cyberian]

1,000 on MasterCard [18.4%] (20/month min. payment)
2,000 on Visa [17.9%] (60/month min. payment)

I doubt if you want to hear this, but you have got to pay these down ASAP.
Get a P/T job, rob a bank, refinance your student loans, whatever you have to do.
That interest will be your downfall if you only make the minimum payment.

 

[brigden]

Originally posted by: Cyberian

1,000 on MasterCard [18.4%] (20/month min. payment)
2,000 on Visa [17.9%] (60/month min. payment)

I doubt if you want to hear this, but you have got to pay these down ASAP.
Get a P/T job, rob a bank, refinance your student loans, whatever you have to do.
That interest will be your downfall if you only make the minimum payment.

I usually pay them off when I get my tax return each April. This time I won't rack 'em up again.

 

[Hayabusa Rider]

First, don't even think of screwing with your student loans. 6.25%? Anything you do would most likely cause the interest rate to rise. Very bad.

That leaves you with 3k in credit card dept. Not much. You could declare bankruptcy (maybe) on the 3k, but that costs too and you trash your credit for years. You cannot lose the student debt, in all probability.

Debt consolidation will not help you. You either have to cut fixed costs or make more money. Sorry, but there you are.

 

[Cyberian]

Originally posted by: brigden

Originally posted by: Cyberian

1,000 on MasterCard [18.4%] (20/month min. payment)
2,000 on Visa [17.9%] (60/month min. payment)

I doubt if you want to hear this, but you have got to pay these down ASAP.
Get a P/T job, rob a bank, refinance your student loans, whatever you have to do.
That interest will be your downfall if you only make the minimum payment.

I usually pay them off when I get my tax return each April. This time I won't rack 'em up again.

That would be one hell of a first step!
Don't lose focus and good luck to you!

 

[notfred]

Get a decent credit card. I have no problem getting cards with 0% intro rates for the first 12 months. transfer your balances to there. Cancel the two (ridiculoasly high interest) cards. Then you pay a couple hundred buck a month, and you're out of credit card debt in a year.

 

[Spac3d]

Bump for you.

 

[N8Magic]

Originally posted by: notfred
Get a decent credit card. I have no problem getting cards with 0% intro rates for the first 12 months. transfer your balances to there. Cancel the two (ridiculoasly high interest) cards. Then you pay a couple hundred buck a month, and you're out of credit card debt in a year.

notfred DEFINITELY has the right idea here.

Not too long ago I too was swimming in CC debt. I took advantage of a CC that offered 5.9% yearly interest on balance transfers until they were paid off. The high rates on the two credit cards are killing you here.

 

[Ylen13]

Just declaring bankruptcy and get over with it. Yes I know I will get flamed for it.

 

[brigden]

Thanks for the replies guys.

I applied for a low-rate, no-fee CC, but was turned down!

 

[Sundog]

Originally posted by: Ylen13
Just declaring bankruptcy and get over with it. Yes I know I will get flamed for it.

For that amount...WTF are you smoking?

 

[kranky]

Good news: you probably aren't far enough in debt to benefit from a consolidation loan.

Don't wait until next April for a tax refund, get going now. Reduce your withholding on your pay now. Use that extra money to pay on your Visa and MC bills. You're crazy for paying that huge interest while letting the government have an interest-free loan for nearly a year. You should be able to figure how much you can cut back on the withholding while still having enough withheld to cover your taxes next April.

Next, cut $12.50 a week from your spending. I guarantee you can find that somewhere if you are seriously determined. Buy generic instead of brand name groceries, reduce eating out, whatever. That's $50+ a month more to pay on your Visa and MC.

When you get the Visa and MC paid, you'll have a extra $130/month available. Put half into savings and pay the other half on your student loan.

Getting a part-time job is the fastest, easiest way to get out of debt. It will come down to how bad you want it.

Once you get started it won't be hard to maintain. Taking the first step is the biggest hurdle.

 

[Sundog]

Make minimum payments on the student and 2K CC. Put any extra towards the 1K CC. Once the 1K CC is paid off roll the payments you were making on it into the 2K CC, etc.

 

[alm99]

Do not consolidate with such little debt. Get yourself a second job and payoff your credit cards. Did you already consolidate your students loans in the past? If not you can consolidate those down to a 3.5-4.5% depending on how long you have been out of school. Do not declare bankruptcy, it is the worst thing you could do. That messes up your credit score for 10 years and you can say goodbye to ever owning a home within 7.

 

[brigden]

First step I'm going to make it to cut up the cards. Then, I've got to cut unecessary spending:

Cut back on booze and night's at the bar: limit to once a month.
No more toys, gadgets, etc.
Cut back on groceries, and no more eating out.

I'm even considering selling some posessions, like my digicam. I don't want to sacrifice my standard of living, but it's better to be without in the short-term than in the long-term.

Basically, I'm going to watch every penny and put the savings towards paying off the CC debt. Finally, I'm going to download movies instead of going to the theatre.

Thanks for the tips, guys. You rock.

 

[kranky]

Don't cut up the cards - you might have a genuine emergency someday and you need to have a credit card available just in case. If you can't restrain yourself from using it, freeze it in a block of ice. You won't be doing any impulse spending that way, and if you need it, it's there.

I'll reiterate about fixing your withholding to use the extra money today to pay down your Visa and MC. It's the same as earning 18% interest on an investment!

 

[Elbryn]

Originally posted by: brigden

Cut back on booze and night's at the bar: limit to once a month.
.

start buying them natural lite's and predrinking before you go to the bar. Get a fair buzz going before you get to the bar and then you can limp along instead of having to get started at the bar.
And yes. i know natural lite sucks heh but some sacrifices are necessary eh? 8D

 

[Babbles]

I have massive debt, makes yours insignifiant in comparison. Nothing to brag about, though.

First, don't worry about your student loans. Just make your minumum payments and you will be fine. Trying to consolidate them would probably end up being worse as somebody mentioned.

Second, credit counsling services, consolidation services - whatever you want to call them - are a scam/joke/ripoff.

It may be contrary to what many folks say, but do not use them. The BEST thing you can do is to CALL YOUR CREDIT CARD COMPANY and either work out a plan and/or try to get them to lower the APR.

Somebody else also mentioned, work on your lower balance then do your larger one. If you can work out a plan with Visa, have them consolidate the MC with the Visa and get a lower APR and work out a payment plan.

All in all $3k in credit card debt is pretty minor therefore do not declare BK. Would be pretty bad in the long run for just a measly $3k.

 

[Lucky]

You might want to see if you can refinance those student loans. Don't know if that's possible or if you could go lower but its worth a shot. As for me, I was fairly lucky. I had about 10K in debt and was able to get my mom to take out 7K in cash when she refinanced her house and I just pay her monthly now. I pay her exactly the interest she pays-about 5%-down from the 22 and 26 percent I was paying before.

 

[Night201]

Originally posted by: kranky
Good news: you probably aren't far enough in debt to benefit from a consolidation loan. Don't wait until next April for a tax refund, get going now. Reduce your withholding on your pay now. Use that extra money to pay on your Visa and MC bills. You're crazy for paying that huge interest while letting the government have an interest-free loan for nearly a year. You should be able to figure how much you can cut back on the withholding while still having enough withheld to cover your taxes next April. Next, cut $12.50 a week from your spending. I guarantee you can find that somewhere if you are seriously determined. Buy generic instead of brand name groceries, reduce eating out, whatever. That's $50+ a month more to pay on your Visa and MC. When you get the Visa and MC paid, you'll have a extra $130/month available. Put half into savings and pay the other half on your student loan. Getting a part-time job is the fastest, easiest way to get out of debt. It will come down to how bad you want it. Once you get started it won't be hard to maintain. Taking the first step is the biggest hurdle.

This sounds great to me. Also, in the meantime, I would call up your credit card company and try to lower your rates. I bet you can bring those down to at least 13% or so.

 

[chowderhead]

Two choices. Cut your living expenses or increase your income. I don't think $3000 is worth declaring BK.
Not sure if you live in the US (i.e. paycheque), but you should pay the minimum on the student loans because the intrest on this in most cases in the US is tax deductible. Focus on paying down one card. Sell stuff on fleabay, get another job. Cut expenses. Move in with your parents or pick up a roommate. Lastly, why are you getting big tax returns. All you are doing is giving the gov't a no-interest loan by having them take a larger withholding. You can bring that down and get a bit more back each pay check which can then go towards your debt. Good luck. It is not easy to get out of debt.