I am 60, husb is 62. Own land/home worth 300,000+ free and clear. Never took out loans – used low interest cr cds. Our credit score is around 730. All pmts on time always. Making min payments though. Used to tfr to lower int cds until fall last yr when all companies raised our int ‘just because they could’ before Feb 2010 ruling. Now int is 10-17 % instead of highest being 6%. We are making pmts monthly of $691/mo, of which $255 is going to interest. We have 12 cards total w/9 companies. Went to CCC with figures, want to chg 50/mo maint fee, lower int and pmts of 721 toward principal will be 568. Would take some 69 months to pay off. I also went to Wells Fargo, applied for 35000 loan w/hse as collateral. Pmts were 300/mo. With that I felt I could pay at least 300 or more toward principal (double pmts) and pay off in half the time. Bank wants us to wait and reapply when he starts getting soc security in Feb. Then our income/debt ratio should be ok for them to approve loan.
I am scared to have a lien on a clear house even though it is a small percentage of what house is worth. Our incomes (my retirement, his soc sec) are ‘assured’ so that should not change. We are not irresponsible spenders, are ‘on top’ of pmts, etc so ques: would you recommend doing the loan in Feb (fee is 600.00). Would pay off cards, only have 1 pmt to Wells Fargo w/interest at 6.75 percent. We considered a rev mortgage but I am not 62 and do not want to remove my name from deed to do that now. We do not know what to do. On stmts says ‘if you pay xxx extra’ bal could be pd in 3 yrs – don’t have the extra do that. Bank loan would be set up 7 years, I can pay it off in 4 yrs I think by doing double pmts. Originally CCC felt the loan was a good plan. What would you suggest? If you need any more info, please ask.
The loan makes sense but based on your situation you may want to look at an unsecured debt consolidation loan through LendingClub.com. LendingClub is a peer-to-peer lending network that cuts out the banks and let’s people just like myself help fund loan requests from others. The downside is they only go to $26,000 but that should at least knock out a significant percentage of your highest interest rate debt.
The reason it sounds like a match for you is the loan would be unsecured. If you decide to go that route, let me know what your loan number is by posting it in the comments below and I’ll gladly be one of the investors that will help fund it.
Please post your responses and follow-up messages to me on this in the comments section below.