debt.........

[tigger]

I applied thru our credit union again, to see if they will approve us for a debt consolidation loan for our 2 Best Buy Cards. We were stupid to buy stuff and max them out. I wasn't able to make the payment for June since hubby's paycheck was beyond pathetic because he had no time for the last shutdown. I applied for $5400, and I'm hoping they will approve us. Those Best Buy cards are the worst...... I make a payment and it's barely taking down the principal!

I don't know what to do if they don't approve us ........ That is what my severance money was supposed to be for. I guess if I don't find anything within the next week, I'm just going to have to take a $10.00/hr job and hopefully, that will help between now and September..... heck, even if it is just part-time I am sure that will help. What irritates me about our credit union, is that they decide for you if you can afford the payments..... I'm sure it is with all other banking institutions, though. How do you negotiate with them?

 

[dtolle]

Well, when a bank or credit union looks at a bill consolidation loan they want to be sure you can afford the payments because if you can't make them, then they eat it. In other words, they don't want you to default and declare bankruptcy and then they never get their money. They make money on the interest they charge, but if you don't pay then they are the big loser.

As far as negotiating with them. In my experience ( I am a "banker" by trade ), you cannot negotiate the loan officers decision. What you can do is fix the problems that the loan officer says is causing them to deny the loan, and then they will usually take another look. The biggest problems are poor credit, and too high of a debt to income ratio. That means, you have too much money going out and not enough coming in.

Now only YOU know your exact situation, and it may be feasible for you to schedule an appt to talk to them. But normally its a 'numbers only' thing, meaning that even if you explain how you plan to make the payments, if it doesn't add up on paper chances are the answers will still be no. But you never know, and it doesn't hurt to try. Be honest with them, and maybe they'll help you out.

I hope you are able to work it out, I know its frustrating.

 

[sfell]

From what understand, credit unions are tougher on who they will approve and from personal experience - I Believe It!!!!

I belong to a credit union and they are the first place I went to when I tried to do debt consolidation. They said I had too much credit to offer me a consolidation loan. After my experience, and after I started CCC - I don't suggest it, I've met people with the amount of debt that I have who got approved but it was through banks like Chase and Bank of America.

 

[sfell]

Daniela, it just seems so wierd that profit & non-profit CCC agencies will jump in a heart beat to help you. Why can't banks offer a 5 year low interest loan so that the monthly payments will be what you can afford?

 

[tigger]

Well, here's the thing, though: We belong to the Motorola credit union, and if you work for them, it is deducted automatically from your paycheck (in this case, it is my husband's check)
So, I dont see why the would turn us down, even if our debt ratio is high.

 

[valanhb]

Well, the CCC agencies make a lot of money off of the deals they make. They are paid by the credit card companies, so they aren't really working for you. They also offer "loans" after like 6 months of payments, and that's where they make real money. I tried going through one of those companies and they didn't help me one bit. Of course, I was in so far over my head that really bankruptcy was the best option for me.

The banks kind of put you in a catch-22 situation - you need a loan to help pay off the credit cards, but they say you have too much credit card debt to get a loan. DUH! That's what you're asking for money for!

I have heard that credit unions are more difficult to get loans through. If they say no, try somewhere else.

 

[deb25]

Maybe some type of credit counseling will help you get payments you can live with.

 

[tigger]

I received an email from one of the loan assistants & she needed to know how much & for what bills...... She said she'd call back in 15-20 minutes & then I'd know! I hope we get approved.

 

[valanhb]

That sounds pretty promising to me...at least it's not a definite no. LOL

I'll keep my fingers crosses for you!

 

[tigger]

No loan

Our debt-ratio is at 39%....... I asked her for advice, and she just said take the lowest & pay it to lower the ration. She also said the credit counseling services can screw up your credit.

 

[dtolle]

Tigger, just because you have direct deposit to that credit unions account doesn't really matter. The debt to income ratio is based on a specific number. Either you fit in that bracket or you don't. Normally where your check goes, etc won't make much difference.

Sabra, I don't know why places don't offer more affordable rates and longer terms. I don't work for a bank right now. My training is in the financial field, but I don't work cause of my kids right now. Anyway, I think most institutions ( like the one I used to work for ) have bill consolidations normally for 2 years or maybe 3. The idea of a bill co is not to help people who are in trouble, but more to just consolidate your payments to just one w/ a lower rate. I have to be honest, once you get into trouble w/ your bills it is way too late for a bill co. That is not the purpose of them, but most people don't understand the concept. I didn't either, until I went to a seminar at the credit union I worked for to teach us how to explain this to customers. Banks offer this to people who perhaps want to consolidate a high rate credit card, and a car loan and get a better deal. But if you are already in default or don't have enough to cover the payments as it is, then there is NO bank that will take you.

Hope nobody thinks I am taking the banks side here.......I am just telling you their side because I have a lot of training in this. I am in no means agreeing w/ their policies though!

 

[dtolle]

Woops, we were posting at the same time. Sorry you didn't get the loan. That stinks!

That was good advice she gave you though. Pick one card and pay it down, this will lower your ratio. Normally you need to get it under 30% or so. Ask them the exact number. Once you get it down, try again and keep doing that till you get approved.

 

[tigger]

I cannot stand Best Buy.......
I called them asking if they could lower our payments & they said no!

We have $699 to pay on the laptop computer & that is done with.... Unfortunately, I don't think that is on my husband's credit report ........ Atleast when that one is gone, we will be saving an extra $86 a month, which will allow us to send that towards one of the Best Buy cards. I know we will get out of it.... I'm just in a mood right now, I guess, lol! :LOL: When I see how much we owe, it p.o's me.

 

[okeefecl]

Tigger-

I would check again into the credit counseling services, but only the ones that don't charge you. I read an article on MSN.com today about reducing debt, and in the article it said that going through such an organization can actually help your credit, because it shows that you are dedicated in reducing your debt. I went to one, myself, because after graduate school I was carrying a large credit card debt. The counselor helped me to draw up a realistic budget that has helped to greatly reduce my debt. Search the MSN web site, I'm sure you can find the same article.

Good luck!

 

[tigger]

If it were up to me, I'd call one of the consumer credit counseling services, but hubby doesn't want to go that route

Plus, we need to get a 2nd car, and I doubt you can do that while you are on a debt management plan.... I'll look for that article......

 

[billchamb]

Debt consolidation loans don't really eliminate your debt, they just move it around. If you had a debt that you only had, say, 6 months until it was paid off, you may be extending that by lumping it in a consolidation. In the end, you pay more than if you had just paid the 6 months regular.

Credit counseling will also adversely affect your credit (if you care about your credit rating). My understanding is, particularly when trying to get a mortgage, services like Ameridebt, Consumer Credit Counseling Services may help you but it shows on your credit report about as poorly as having filed bankruptcy.

From personal experience, go to the library and find a book called "Financial Peace" and read it in a hurry (not hard to do, trust me).

Debt/credit cards suck!

No doubt you and your husband will get through this.

Bill

 

[valanhb]

I agree with Bill - if there is any way to avoid going through CCC's don't do it! What it says to the creditors is that you can't handle your debt on your own. I know we had a thread on CCCs earlier - Here it is! Read the article in the link on the second to last post. Very interesting.

 

[tigger]

I forgot I had started that thread! I know we will get out of it....