Over My Head In Debt and I Don’t Know What To Do!


Our latest applicant feels that she is in over her head in terms of her debt situation. She has been talking with a friend who has made some suggestions regarding how to manage her situation. She has a mortgage of $50,000, $16,000 in credit card debt and a car loan with a balance remaining of $9000. She is overwhelmed making payments each month to the mortgage company, the property tax, the utilities, the car loan and three credit card payments.

She apparently has sufficient equity in her home that she could refinance the mortgage increasing it to $75,000 and pay off the car loan and the three credit cards. This would be a smart thing to do. Not only would she eliminate four monthly payments, she would also pay far less interest costs on the money she owes to the credit card companies. The car loan is at a pretty good rate, but simplifying her life is important to her at this time.

Depending on the amortization that she takes for the refinanced mortgage, she could end up with lower monthly payments for the total amount than what she is currently paying. This would be due to a longer amortization and a lower interest rate as well. Her friend has been giving her some good advice and now the job is to find a lender that will refinance her mortgage and give her a competitive interest rate for the mortgage.

We also suggest she get her credit card spending under control otherwise she could end up in exactly the same situation all over again, without the solution of being able to refinance her mortgage. This is really how a lot of people get in over their heads in debt and then cannot get out of their situation because they owe too much money. Ditch the credit cards and only spend what you have in cash in your account after you have paid all of your monthly bills. Don’t forget to set aside some money for emergencies and surprises. They always come along.

DEFAULT LOAN APPLICATION FOR BORROWER’S INFORMATION

Loan Amount :: $75,000

Loan Application and Processing Speed (when do you need the funds):: as soon as possible, I cannot meet all of this months payments

Do you currently have a mortgage? ::yes and a loan and a bunch of credit cards

Bank Name and Branch :: Wells Fargo Bank, Alessandro Road

What City/Town, State and County do you live in? :: Riverside County, California

Zip :: 92519

What is your employment field? :: Hotel management

Employment Position :: Assistant Manager

When are you paid? (monthly/weekly/biweekly):: biweekly

Your credit rating to be – excellent, fair, or bad? :: it was great until this last year when I spent too much and cannot manage my credit cards. It will tank this month if I do not meet these monthly payments

How did you find us? :: searching online for help to manage my debt

How are you paid? (direct deposit/paper check):: direct deposit

Gross Amount Per Paycheck ::$1346

Do you agree to have this information published online, without your PRIVATE information of course? :: sure what have I got to lose at this point, I just need a lot of help to manage my debt

Extra information here please (some detail):: I feel that I am really over my head when it comes to managing my debt  situation and right now I really do not know what to do. I have applied for a $75,000 mortgage because a friend of mind suggested that I should simplify things and get all my debt and monthly payments consolidated. They felt that I would have a clearer picture of what I owed if I took this action, but I am really not sure what to do.

Basically what happen is that I bought a home and charged a great deal of the things I needed for the home to my credit cards. Now I have a mortgage payment and three credit card payments in addition to the personal loan for my car. I barely make enough to meet all of the payments for these things and I really want to pay off the credit cards as fast as possible.

I only have a small mortgage since this was a foreclosed home that I got really cheap and now the market has gone up by 25% in just the last year. My house is worth far more than what I paid. I also had a relatively large down payment so I have lots of equity in the home based on what my friend is telling me.

Note to Lender :: I work as an assistant hotel manager, have been doing this for the past couple of years and really like the work and the people I work with. It pays ok and I have been able to have a decent living until I got carried away with these credit cards.

If I can remortgage the house and add $25000 to the mortgage, I should be able to repay the credit cards and the car loan all at the same time. Then I would only have one payment to worry about and not be trying to make sure that I have enough in the account all the time for all of these payments.

Can you help me understand what the best thing to do and how I can get out from being in over my head in debt?

 

Category: Loan APR 4% APR 5% APR 6%
Loan Principal $75,000 $75,000 $75,000
Payment Schedule Monthly Monthly Monthly
Length of Term 15 20 30
Amount to be paid $97,623.46 $112,654.25 $142,684.93
Total interest paid $22,623.46 $37,654.25, $67,684.93
Paid per installment $534.92 $462.96 $390.92

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11 Loan Requests

  1. paula applied for the following loan:

    Loan: 18000

    Speed: Pay off outstanding debt

    Credit: bad

    Location: brampton, Ontario

    Income: Myself $2700 Month after taxes Husband $3200 Month after taxes

    Reason:

    Would like to pay down on some high interest loans and catch up on payment to get credit back on track and then be able to refinance mortgage

  2. Nicola applied for the following loan:

    Loan: 8000

    Speed: As soon as possible

    Credit: poor

    Location: Scarborough ontario

    Income: I get paid every week. My pay is about $652 base. Some weeks I work overtime so my paycheck could be higher. I have been employed for 5 years with the same company.

    Reason:

    My main purpose is to pay off a portion of my car loan. I have been falling behind on my payments as I have been helping support my parents by paying them money to manage their bills. I’m hoping to get a loan so I can payoff my outstanding debts and hopefully take off some of the stress and hardship ihhave been dealing with. It been tough as I do have medical complications with my health due to stress. Any help will b appreciated.

  3. Melanie applied for the following loan:

    Loan: 12000

    Speed: ASAP

    Credit: poor

    Location: Montreal, Quebec

    Income: 2400 salary, 600 child support, 500 family allowance

    Reason:

    I fell behind when my mother was sick last year and in the hospital, i was trying to keep up with her bills and mine so that when she was better she wouldn’t be so worried. She never got better so she never paid me back and now i am waiting for her house to sell which could take years. My debt is just too many minimum payments are killing me. i need one payment so that i can keep my head above water. please help me!

  4. Millie applied for the following loan:

    Loan: $50,000

    Speed: ASAP

    Credit: poor to fair (slowly rebuilding)

    Location: Buchanan, Saskatchewan, Canada

    Income: Average $2000.00 NET - paid biweekly by direct deposit @$15/hr - am getting a raise September 2016 to put me at $16/hr.

    Reason:

    It’s a combo loan, that’s what I’m calling it.

    For starters, to get rid of the existing car loan (through Carfinco) and the PayDay Loan (easyfinancial) and work with someone who can provide me with a better interest rate than what they’re providing. (Carfinco is at over 20% – but I had no choice in order to obtain automobile financing so that I can actually take myself to work.) The PayDay loan was used to catch up on bills I fell behind on because that money was used to secure the down payment on the car so I could have one. The total amount to clear these two out, if taken care of right away shouldn’t be more than $10,000. At present, if I stay with Carfinco’s financing I’m paying 3X this amount over a 6 year period.

    The other part of the loan is to secure a catering truck (valued at about $25,000) that I would be using to bring my catering business to a more professional level. In addition to my fulltime job I cater to functions here and there, as well as sell products I’ve put together to family and friends that include soups, sauces, prepared meals and even pet food.

    I’ve always wanted my own restaurant, but I believe the catering truck is the route to go. The plan is to roam this truck between the provinces of Alberta, Saskatchewan and Manitoba to various events that include trade shows, exhibitions and farmers markets between the warmer months from May to October.

    However, during the colder months it doesn’t mean the catering truck stops there. It becomes somewhat more localized – serving as the kitchen I work out of when preparing the products I intend to sell online, at shows and even a few select stores who’ve already expressed an interest in what I do.

    In addition to the catering truck I wish to develop a year-round greenhouse (value about $10000) where I grow the majority of my ingredients that are put towards the recipes I use for my culinary product line. The cost of the greenhouse would be to develop a 400 square foot building that is capable of maintaining ideal environmental conditions to keep the greenhouse functional throughout the entire year. Of this structure there’d be a corner where the catering truck would sit during the colder months and serve as my base of operations during the colder months.

    The remaining $15,000 requested is to cover areas that include advertising, start up fees, equipment, supplies, licensing and insurance. I want a good, healthy start to this venture as it will be something I will be doing in addition to working my fulltime job with Olymel.

    The greenhouse part of this business is what I can work on when not on the job. I do this anyway as a hobby at home, so stepping it up to a professional level is not an issue. I already prep recipes and such before and after working hours so again this is not an issue. Catering I’ve done on weekends anyway, so shifting this to go to sites that have weekend fairs, etc. is not a problem.

    The intent is the first full year of this business venture I wish to embark on is to still keep working my fulltime job and do this at the same time. When it becomes established that this business can function without my need to maintain my job with Olymel then the shift will be made so that this business can receive even more attention and increase it’s profit margin.

    The name for this business venture is Pioneer Kitty Kitchen. Although not officially registered as a company yet, this is the title I’m favoring so far and what I’m recognized with.

    A $50,000 loan is something I can pay off at $7200 per year ($600/mo) for up to 10 years, which is a $72,000 payout. I do not wish to be in debt with this for more than a decade, so even if the interest margin isn’t good enough, perhaps after the 5-year mark there can be a review to see where both sides stand at that point and go from there that will serve as a mutually beneficial agreement we can live with.

  5. Anza applied for the following loan:

    Loan: $5,000

    Speed: Immediately

    Credit: Not good

    Location: Scarborough, Ontario, Canada

    Income: Abt $4,000 gross monthly. Hourly shift worker.

    Reason:

    I got myself in a financial mess and I very much regret the circumstance I find myself in today. I’m praying for a chance to get my finances in order. I’m a transit bus operator today. Grossing around $50k annually. I’m in trouble and in a desperate situation. I have no collateral, not so good a credit profile due to another world of business from many years ago. $5k will clear up my slate, pay off payday loans, give me a second life. $2k-$3k will help me catch up on bills. The longer the term 1 yr or more at a reasonable rate would be much appreciated but I will consider just about anything at this very dark moment in my life.

  6. Ann applied for the following loan:

    Loan: 5000.00

    Speed: Today

    Credit: Bad

    Location: Ottawa

    Income: I work full time and take home $2,648.00 monthly.

    Reason:

    I need this loan as I am behind 2 months on rent and my Hydro and Water bill are also behind. I just want to get my life back on track.

  7. Karen applied for the following loan:

    Loan: 5000.00

    Speed: ASAP

    Credit: Poor

    Location: Edmonton, AB, Canada

    Income: Biweekly net income of $1375

    Reason:

    After going through a rough time financially I have accumulated a large amount of payday loan debt that I’m finding impossible to pay off due to the interest rates. My situation has now leveled out and I’m trying to get out of this cycle and feel the only way to do this is to get one loan to clear them off and make one monthly payment at a reasonable interest rate. I’ve been with my current employer for approximately 10 years and at my current residence for the same amount of time.

  8. jenn applied for the following loan:

    Loan: $5000

    Speed: a.s.a.p

    Credit: not sure

    Location: Ottawa , Ontario

    Income: $1300 from o.w. $1124 from c.t.c

    Reason:

    I recently quit work due to medical reasons. I am now stuck in a payday loan cycle. I would like to borrow $5000, to get myself out of the pay day cycle and be a little bit ahead.

    My expenses are as follows.Every month i pay $900 for rent , $363 to cash money , $363 to money mart and $335 to magical credit. I have never missed any payments. I pay my loans off and in turn have to re borrow. I re borrow from cash money and money mart, as magical credit is an instalment loan for $ 3000 .I also have an outstanding gas bill of $1900 and a hydro bill of $500.

    I pay my loans out of my baby bonus every month.A long term loan would be greatly appreciated. It would greatly help me and my family get out to the cycle i have created.

    Thank you for your time.

  9. raymond applied for the following loan:

    Loan: 10000

    Speed: asap

    Credit: not bad not good

    Location: st albert

    Income: 4000-6000

    Reason:

    times are tough in Alberta .I run a small framing business and have had a hard time finding work (keep being underbid)I have an opportunity to get a lot of work in London Ontario (where we are from) but need the money to get there .There is work for my wife in healthcare also

  10. Donna applied for the following loan:

    Loan: 5000.00

    Speed: Now

    Credit: Low score 534 due to inguirys

    Location: Regina

    Income: RQHR net 5000.00 RN work pension net 3723

    Reason:

    To pay off out standing debt..did large addition on house now have to pay remaining out standing debt

  11. Laura applied for the following loan:

    Loan: 2000.

    Speed: Asap

    Credit: Poor

    Location: Toronto ON

    Income: $2600.00 monthly derived from pensions @ $1650.00, $565.00 child tax $425.00 support.

    Reason:

    I need to consolidate payday loans that are all current but costing approx. $500.00 monthly interest without the relief of lowering principle:(
    Thank you for your time and consideration, Laura

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