I am living on social security and savings, which are quickly becoming very scant. As my roof leaked over my head as I was sleeping, realized I needed to do something about this and thus began my quagmire (good word!) of a problem. Paid $8000. from five 0% promotional credit cards, carefully figuring out how much each card needed to be paid every month so as to not incur interest on any of them.
Have been trying to borrow $15,000 to be repaid in 4 years in order to pay off cards and not continually pay $800 per month to these Companies, but due to 48 mos repayment, could easily pay $300-400 instead.
The problem is that NO ONE and i do mean NO ONE (banks, Loan Cos., Lending Club, Am One, Spring leaf, etc, etc.) will give me a loan. Credit score is 785 but my DTI is Very high!
Any feedback would be GREATLY appreciated and I would forever be in your debt (funny word for this question).
I look forward to hearing back from you, and btw, am job hunting, so if you need another pair of eyes, or researching, etc. please, also let me know. Thanking you in advance.
Thank you for reaching out and asking your questions.
So let’s take a step back here and look at your situation from an outsider/lender point of view.
It seems you’ve already demonstrated that no matter how good your credit score might be, the underlying issue is you are maxed out. The amount of debt you have is very high when compared to your income. And that makes you a very high risk for lenders.
It is very frustrating that the time you desperately want to borrow money is the time most legitimate lenders start to back off.
As you may know, I’m a fan of LendingClub.com and an investor in loans. I even help fund reader loans through Lending Club. But, and the big but is, even though Lending Club is somewhat more liberal than Main Street banks, they too have lending limits based on past borrower performance.
Even with their more liberal standards they still have losses and loans that go unpaid. The fact they would not lend to you a clear sign you are in trouble.
There isn’t anything you’ve shared that would indicate a loan is the best way out of this quagmire (great word). You are draining savings to get buy, and juggled cards but it does not sound as if the debt has been reduced in the process without draining assets.
The fact you are draining savings to make ends meet is a huge red flag for me.
Savings is there to call upon in an emergency but a continued reliance on it is not a strategy, it’s a sign that things have to change. It’s like the pain of a headache or the cough of a worsening cold. It’s a symptom.
Your credit score is the least important factor in this situation. Your credit score is just a number that is assigned to you for the lender benefit. It is not an indication of how great of a job you do with your personal finances.
Over the years I’ve seen people do some pretty silly things just to try to maintain their credit score. In the long run they’ve wound up in worse shape.
So let’s set our sights on turning this situation around.
Our goal needs to be to get your life to fit within your income. To do that, and based on the fact you are primarily living off Social Security, we need to set our sights on some action that will quickly and rapidly bring your expenses back within your income.
What we have going on here with you at the moment is a classic example of dissavings.
That’s where your expenses exceed your income and you drain irreplaceable money to get by.
The one part of this equation we don’t have on our side here is time. The more time that passes without taking action to alter the situation, the longer you will drain what little savings it sounds like you have left and the worse spot you will wind up in.
The key to overcoming this is swift and decisive action to bring your expenses back inside your income and leave a margin for saving again.
Rather than continue to chase the loan it’s time for you to meet with a local bankruptcy attorney and discuss what bankruptcy would mean for you.
You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.
Bankruptcy is not an option of failure, it is an option of accepting responsibility for the reality of your current situation.
My ultimate goal is to set you off on a path that gives you the best chance of a safer future and not chasing the elusive loan which clearly is too risky for you in your current situation.
By accepting the reality of the situation and taking action you will be able to do better moving forward and have the best possible chance at a better tomorrow.
To better understand bankruptcy, I’ve pasted a number of links below to help you get rid of the common misconceptions and dispel the myths.
Please post your responses and follow-up messages to me on this in the comments section below.Big Hug!
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