Consolidation loan...

if they have a commercial on TV , it's probably a "for profit" company that does loans.
And they are preying on people that are already in debt.
kinda like injury lawyers.....

 

Great example Jason
Thanks for posting

 

The Dave Ramsey method works. Not the best method "numerically," but people succeed using his method because it helps them stay motivated. As previously suggested by boettg33, check his "Total Money Makeover" out of the library, and read it, it can do you good.

The worst thing is if you get the loan, thereby getting enough breathing room to feel better, and then end up with both a loan and more on the cards again. Dave Ramsey says destroy the cards. Clark Howard suggests putting them into a ziplock of water, and freezing them. Either method can work, it is up to you to decide.

I have never had a debt except education loans, which I paid off in three years. I have owned two different houses, and multiple (used) cars and trucks over the years, and have never owed a dime on any of them. It can be done. I am neither bragging, nor saying that is the best way to do things, but I like not having the stress of debt. (Probably most people are better off buying a house with a loan if it allows them to buy it sooner.)

So, grab the book, and see if it works for you. Read that before you think of consolidating, so that you can be sure you are improving your situation, and not just making it worse.

Best to you my friend.

Greg

 

Well, i wouldn't say keeping up with the mortgage is buying on credit.... but i do agree with you that no one saves for anything ahead of time.

the way i look at it, 40k was a new car that i can't buy. The hyundai is paid for. instead of it lasting 5 years, it needs to last 10. its on 6 so it's already eating in to the car payment that i can't have area. My goal is to have all these finished by 2017. I make pretty good money and live in a high cost of living area so 40k isn't as big of a deal to me as it is to some other folks who don't earn the same. Like, if i made $25k a year, i'd be soiling my pants with that overhead. I'm also not going to put my life on hold and be miserable because of it either. I COULD pay it all off with a disbursement from my 401k, but that's stupid and penalty city.. but knowing in 'theory' i'm debt free and still have a retirement fund after that makes it a little easier to cope with. it's just that in the market, it's making me money. and the cards aren't charging me much to float it and pay on it. So, it continues to float.

I COULD work weekends some where. I could cancel netflix, scale back my tv package, not take my gf out to dinner once a week and pay it off faster and save a couple hundred bucks in transfer fees over the life of it.
But, at what human cost? One needs to weigh the true value of living your life against being a purist on a mission to pay back banks who don't care about you anyway.

Life happens. chit happens. being financially secure and not indebted to anyone feels great. But living by candle light bored after sunset to get there isn't a solution to me. Besides, if i contribute to earnings of the banks, my retirement funds go up making it a bit of a wash (ok, exaggeration)

 

Sorry Brian, I didn't mean it that way. I should have put that in 2 different posts.
(edited)
Keeping yourself above water during a dry spell is not a problem. We do what we have to do

 

life is a fine balance. First you have to realize money is a TOOL, you use to get what you NEED. Once you treat it that way and use it for its purpose, you will be happy. If you do not have the TOOL for the job you don't do it, no different than most of our jobs we do for a living. MM don't have wrenches he doesn't fix the equipment. When you are constantly looking to make more/save more money, you are creating the same scenario as trying to keep up with the Jonses, buying new cars/vacations whatever. Accept what you have and live within your means and you will be amazed at how much more you will have.

 

Lots of good replies on here I really appreciate all of the feedback and advice. Right now I'm barely making the minimum payments on stuff and yes I know I did this to myself but my thinking is if I consolidate this debt into one monthly payment at a much lower interest rate I can pay it off faster. I'm looking at going from 16-18% interest to 5 or 6% which should save money and then we're also looking at other things to save money and throw against the debt. With higher energy bills through the summer our little cushion is gone but if I can knock my monthly payments down a couple hundred that should help and then with lower interest I'll be paying more towards the debt.

 

Just remember to not get into the trap of using any cards you may have after getting this loan. That'll just dig a deeper hole.
Sounds like you're on the edge. Can you make any cutbacks to your lifestyle and put that money toward balances?
Get a tax return? Put it all on a bill instead of spending it on something else. Bonus from work? Do the same. Overtime available? Use it to pay down balances. Do without for a bit to get things under control. It won't kill ya'.
Call and ask for better rates on any cards you have.
Use fans instead of the air conditioner. Clothes on a line outside. Our dryer probably accounts for 1/3 of our electric use. If you can't afford to pay cash, don't buy.
There are a lot of things that will help if you're willing to utilize them.

 

This weekend we are rounding up all of our various credit cards and destroying them. Im done with those things Ive gotten into more trouble with them and its over.

 

Consolidation loans can make sense-if they reduce the interest rate and, as many have pointed out, you don't treat the savings as a windfall or don't borrow fresh money.
I helped my fiancé get a loan through a bank years ago. She used it to eliminate her credit card debt, and pay off a high interest car loan. She paid it off early and has been virtually debt free ever since.
Personally, I don't buy anything and borrow money unless I can get a 0 or 1 or 2% loan (very easy to do today) and I have the room in my budget to make 2 payments a month-not that I do every month-and that I have enough savings to pay the loan off at anytime.

 

Save one for absolute emergencies. Once you consolidate, you can still follow Dave's plan. In fact, I'd argue it's critical to staying on the right path. Let me know if you need any assistance. We are in the middle of this plan.


Jason from RI

 

a card is basically required these days. booking a flight, renting a hotel, a car, etc all require it as collateral. some will take a debit card, but some won't. As someone else said above-- it's a tool. But you must not take advantage of it and use it when you shouldn't.

Consolidating debt helps you lower your min payments across the board, but it doesn't really get you more on principal directly. (Assuming same interest rate). So, why go for 5% fixed when you can have 0%? and then move it again for 0% some more.