“Dear Steve,
In debt to my eyeballs, starting with under-employment and day care for three kids, including infant twins, 10 years ago. Paid cash for day care and put everything else on credit particularly when husband was unemployed. Snowballed from there.
Now have a loan from credit union (less than $10,000), two massive credit card balances(roughly $12,000 each) and other cards that would be manageable if I could do something about the two big ones. My husband helped me out some, but I need to use the massive cards for some expenses and ran them up again. Was late on payments fora time, which torpedoed my rating.
Cash is scarce even though I’m pulling down $140,000 a year. Pathetic. But my monthly payments are killing me. Can’t do anything with the credit union. Don’t want to deal with any more credit cards.
And afraid to tell my husband that I’m drowning, since he’s helped out before and I’m now back to where I was. His credit rating is very good but he just got us a daly needed new car. One child ready for college in another year.
Looked at Lending Club. Qualified for $24,000 loan at 24 apr for 36 months (gulp). $900-plus monthly payment. Good deal? Is Lending Club good?
Mary”
Dear Mary,
I’m a big fan of Lending Club. They’ve been one of the better peer-to-peer lenders out there that makes unsecured debt consolidation loans. In fact I even help to fund them for my readers. If you do decide to go with them, let me know, in the comments section below what your loan number is and I’ll help to fund your loan. They are a legitimate lender.
The real question for me is if a loan makes economic sense for you. You’d have to take a look at the interest rate you qualified for with Lending Club and the combined interest rates of the debts you would pay off.
If you paid off the cards with the debt consolidation loan I would not be willing to bet you’d not run them back up again. Only you can really answer that. You might promise you won’t but we’ve been down that road once already.
I’m also a bit concerned that your household finances seem to be dived into his and hers. What’s going on there? Do you have an open and honest channel of communications between you and your husband about your total family finances? If not, that’s the first place I’d start before you react emotionally and just tried to borrow your way out of debt.
If you are willing to spend a bit of time, I think my book, which you can download for free, titled The Path to Happiness and Wealth, may benefit you. It will help with some introspection before just leaping at a loan.
If the loan doesn’t make mathematical sense then we should look at some other options.
I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.
Then use the free How to Get Out of Debt Calculator to review your options.
Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.
Please post your responses and follow-up messages to me on this in the comments section below.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Do you have a question you'd like to ask me for free? Go ahead and click here.
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Hi Steve, I found you and your honest advice while strategizing about how to rebuild our finances. I stopped working after my daughter was born and then got ill and resorted to paying for expenses with credit cards while paying cash for childcare and bills. Fortunately I am well and working full time again. We pay all of our bills on time every month but with 2 cards at a very high APR, it will take a long time for us to get our from under this beast and start accumulating wealth again which is our goal.
I appreciate the alternative to debt management programs that you have made me aware of like Lending Club. I never would have considered this as an option and, now that my husband and I have weighed all our options, believe that it’s the way to go! It will allow us to get a handle on a few high interest credit card debts that are making it quite difficult for us to get out of debt. I know that you are a LC investor. Would you consider funding our loan? It’s 3706097. Thanks for all that you do and for offering some out-of-the-box thinking on these very-hard-to-navigate issues.
Just helped to funded it. Good luck on your efforts.
Thanks for your support, Steve! I am really excited about this loan opportunity, and am looking forward to the day when I’m in a position to become an investor, too.
Steve, thanks so much for your advice. I read you books, and have thought on this for the past month and reviewed my options. I have applied to Lending Club for a loan, 2218725.
I went to help fund it but the current status in “under review.” I’ll circle back around again in a day or so.
Steve
Mary,
It looks like your loan request is now 100% funded. Congratulations.