fam, want to get out of debt in 2021. need help. i have ~95K in debt ~50/50 credit cards and student loans. my credit score is ~600. i make ~175K a yr. but the biggest hits on credit are 1) utilization and 2) history (~4 years avg). i made some mistakes with credit cards a few years ago and am holding ~40K @ ~22% int. my thought is to get a personal loan for ~50K but due to my credit, that’s also at ~20+%. think i can pay most of it in 2021 but feel like i have no recourse but to do it 20+ int

like
Posting as :
works at
You are currently posting as works at
Highlighted IconHIGHLIGHTED

Sure, getting a consolidation loan or 0% card (if you qualify) will help, but you need to focus on lowering your monthly expenses and directing the savings to pay off your debt. At $175k this isn't an interest rate problem, your spending behaviors need to change.

like

Would suggest creating an extremely frugal budget and annualizing the amount you'll have left over to pay debt in order to see what you'll be able to realistically pay off in 2021.

Expect to pay 20%+ for the foreseeable future based on your credit history. Focusing your extra debt pay down on the highest rate balances first is going to be your best strategy.

Keep track of your debt pay down month over month so you can see the progress you're making.

like

1) Identify every area where you can cut monthly expenses (easy ones like memberships, subscriptions, takeout, clothing, etc. to harder ones like where you live, what you drive, groceries, etc.) to get them as low as possible

2) Put all of your disposable income towards paying off debt each month

3) Make the minimum payment on every card but one, and put all of the remaining money towards paying the remaining card

4) Target the highest interest card first, if you get to the point where multiple cards have the same interest rate, start with the one with the lowest balance. It helps feel like you're making progress so you keep up the frugality)

5) Try shopping around for other loan interest rates. I found the best rates with Lending Club, which helped

6) Buy nothing on credit, buy nothing you don't need, and try to learn to get joy out of seeing your balance decline. At your salary you should be able to make a lot of progress in a short amount of time.

Once you are debt free, imagine how much money you'll feel like you bring in each month. Dedicate a good chunk of that to savings and then slowly start bringing back luxuries to treat yourself, but always, always, always, pay off your balance each month.

like

Hey @OP, I work at a start up where we help consumers find the lowest interest rate personal loans. Try our site at Fiona.com. Best of luck!

Recent IconRecent

Do a balance transfer of your CC to one that has a 0% balance transfer deal going on. And try and pay it off in the allotted time period

like

I’m with M1. Same comp and cleared 80k in one year. Haven’t upgraded my lifestyle. This is the time to save aggressively since there’s no frivolous things you can spend on these days.

like

Read The Total Money Makeover by Dave Ramsey

like

We went through Dave Ramsey's program you just have to decide how much sacrifice you want to do in balance with how long it will take. we paid off over $160,000 in 30 months and it was hard but so worth it. Don't do this for others, do it for yourself and family. You have to be ready to say "NO" and not let others try to spend your money.

We did this a few years ago and still sit down and have budget meetings, set goals and decide where our money goes.

As soon as you get on a budget you'll feel like you got a raise.

I like having permission to spend after it was all done...Life is so much better.

like

I would focus on paying off/down the highest interest first and work your way down from there. If you have multiple cards with the same interest rates, pay off the highest balance first.
You could call the cardholders and ask if they would lower the rates (probably not, but never hurts to ask).
Also, don't know your spending habits, but I would recommend not using any of your cards until you get them paid off. Plus, if you are serious about wiping this out in 21, you probably need to live as frugal as possible and give up "luxuries" such as restaurants or food delivery

like

thank you! so basically just grind it out at 20% (higher amounts first) and cut back spending

likeuplifting

Some initial thoughts:
1) call the credit card company and haggle a lower rate. I’ve done it before, and while they only lowered it for a small period of time, you should probably look into it anyway
2) you can transfer your cc debt to a new cc with a lower rate. Look into Navy Fed or a credit union. Interest rates are lower and I know navy fed gives you an option to transfer other debt.
3) take your CC’s out of your wallet or mobile wallet. Don’t give yourself a chance to keep building upon the debt
4) if any of these debts went into to collection, you can absolutely negotiate with the company that holds the debt.

like

I would counter this as someone who had this mentality earlier in life and has been truly broke before. You still need to find a way to build up a small savings cushion (at least 5K or so if you can). Not having a savings is how you end up having to turn to debt. Don't feel like you have to save up all at once, but with your salary you should be able to get there in a few months. And, as others have said, cut the excess spending. If there is a way to get out from under a car payment do it and drive an old simple car for a couple years. Cut your phone plan. Don't get new phones. Get your recurring expenses at least a few hundred dollars lower and convert that into savings and paying down those loans.

like

I would not care about interest rate.

Focus entirely on budgeting and building good financial discipline. You need to cut back 30k minimum of your annual spend

likesmart

You can do it. Your salary is very good and your debt is not super unreasonable, aside from the APR on those credit cards. Set goals for where you want to be each month in terms of savings (you still need to save - do not only pay down your debt or this will turn into 2 steps forward, 3 back when something comes up), card payments, and spending. Hold yourself to that plan. It will seem like drops in the bucket at first but you will start to feel the load getting lighter after a few months of sticking to your plan.

like

1. Go to bank/credit union you have a relationship. Ask for a personal loan that has a lower interest. 2. Cut down expenses that are unnecessary. 3. Give yourself a timeline to pay down debt.

like

Good suggestion. But it’s going to be hard to get a personal loan with this much debt and 600 score. But worth trying.
My roommate went into similar situation 7-8 years ago and we kind of helped him out by lending some good amount of money. Of course, we trusted him and knew he’ll pay back. If you have trusted friends, try that option as well(at least for credit cards).

This is something that helped me out. There’s a lot of practical advice on this blog: https://www.savelivethrive.com/blog/4-ways-to-lower-your-credit-utilization-ratio

Good luck OP!

Step 0. Build a monthly budget. Include all expenses and incomes.

Step 1. Remove all current credit cards from your wallet, make it harder to use them.

Step 2. Pay minimums on your debts and save 3-6 months of expenses (5k minimum, but if you can reasonably get to 10k do so).

Step 3. Take what you were saving each month and attack your debt 1 card at a time. Mathematically it makes the most sense to chase the highest interest card, but in the interest of getting the ball rolling you may want to chase the lowest balance first. After paying off one card roll that payment into the next card.

Step 4. After paying off your CC’s open/use one card, with the lowest rate that you pay off completely every month for your repeating expenses (utilities, rent, grocery, etc). It really helps to build a budget by the time you get to this step.
Step 5. Pay down your student loans and then convert to additional savings/investments.

You make more than enough to pay off your CC debt fairly quickly. It just seems like you have more of a self control issue

Bruh how the fuck do you end up in this situ. I have a paid off car (bought new at 60k), paid off house (460k) and 4 dependents. I started making 179k. Credit score is 800.

Never did I think I’d be any sort of inspiration but looking at your situ, it possibly could be.

Wow tough crowd

Cut every penny from your budget and just pay it off ASAP. No Starbucks or meals out or anything until it’s gone. Give yourself a small group weekly fun budget of like 25 bucks.

This is not going to be a popular opinion, but have you considered a life of crime instead to make some quick money and pay it all off? Should be pretty easy these days.

Related Posts

I am moving from the US to UK. Question on 401k transfers- am i able to transfer it to any retirement benefit in London? Any experiences? What would be the best course of action? Thanks in advance!

like

Anyone in the NYC or Jersey area looking for a succession plan for their book? CFP, ChFC and MBA with 10 years experience as an Advisor within the banking channel. Currently managing roughly $100 Million. Most of it is not portable and a lot of it is dead money inherited from other advisors.

like

Which credit card gives you the best return?

like

People worrying today should read books on trading psychology! Not being patronizing- it will help you in the future, not just for investments but for doing better in life!

like

What are ways to deal with high latency mricroservice in a given region. Given that it's Cpu utilization is not exhausted.. So no vertical scaling ???

What percent of salary is your RRSP match or pension? Please feel free to comment even if it's zero so we have a full picture

like

can any explain the advantages/disadvantages of doing a lump sum pension payout rather than waiting till retirement? I no longer work for the company so does my pension not grow so getting lump sum is better to move to an IRA? thanks in advance!

looking into rolling old 401k into a Roth IRA. I just graduated from MBA and therefore have only worked a few months in 2022. Am I correct in thinking that the taxes I pay will be lower than if I did this in any other year where I worked the full year? Any other drawbacks or things to think about?

like

CHANGE MY MIND: 25Y, salary 80k, 25k in HYSA, max roth, contributing to 401K. I’m currently living with my parent (free) since the pandemic started and moving across the country whenever it’s back to “normal”. But I miss having my own place, and looking at a $1500/m apartment for max 6 months. I know it’s not a financially good idea since I can keep living for free but I don’t like being at home(miss having my own place). I would be saving like $1500 each month but it could be $3k!

like

Hi fishes,
I'm 22 and planning to take a life insurance. I'm comparing all policies and max life seems attractive as it has good claim settlement ratio and less premiums. But there is no office near our area. My worry is that if there is a need to claim in future, it can be done all online by my nominee? Is it recommended to take policy online in any platform(like policybazaar)?
Other options I'm considering are SBI life, HDFC life which offices are available in my locality.
Please guide

like

LOL at ending the financial year with 63% utilization.

like

Hi Guys,

Can you please tell me in hand Salary

- how much will be tax deductions - &

- how to save tax

Post Photo
like

Seeking advice on 401k: Recently joined PwC and initially was planning to transfer prev 401k into PwC’s so that I have the option to back door/mega in the future but seems like that won’t be an option anymore. With that said, should I:
1) Just roll over current balance into Vanguard IRA (and potentially convert to Roth IRA). PwC’s investment options aren’t great! 2) Consolidate into PwC 401k
With the passage of bill still uncertain, I’m not sure what to do.

like

My wife is using my credit card too much.
Monthly around 13K.

Everytime I confronted her the ending is always the same, I loose the argument and end up paying everything.

like

Uk pension experts.
Can we - UK employees, select where our company pension is invested and pick the stocks and shares we want to invest in, as US employees can with their 401k?

Just found out im auto enrolled in fidelity netbenefits for 401k, are they good? Not knowledgeable about this at all but i wanna make sure i start off right. I wanna be able to choose my own investments and def wanna put a decent amount in crypto and high dividend stocks

like

Senior and manager told me to work on something for the client but to not charge my time... this work is a good 2 days worth. Wtf do I charge it to then and is this going to affect my utilization? BS😠

likehelpful

I would like to know how much will be in hand for London onsite from tcs for an IT Analyst.

I am planning to travel with spouse and 3 year old kid. Wondering about savings as well.

Any guidance is appreciated!

like

Hi All,

What is salary someone should expect while moving to European countries (only countries where currency is Euro)? Please suggest.

Aim is to make maximum savings.

like

How do you manage 401k withholding when you change jobs mid-year to ensure you don’t exceed the maximum contribution?

like

More Posts

Any openings in IQVIA for business research, market research or beginner level analytics role in Global insights team? Please refer me

like
like

Holy shit! That was scary!!!

like

What do you do with all this free time?!

like

I need to dispose of my King size mattress as I cannot take it with me while moving out from Boston.
Having a really hard time trying to sell / donate it, despite it's in a great condition as was used only for a year.
Any tips on where to conveniently donate it?

like

Do we think the remaining Cooley folk will get bonuses?

like

Any good PowerPoint SmartArt memes?

like

What does liking your job look like or feel like?

likefunnyhelpful

Would you feel comfortable telling HR that your service line’s culture sucks and name the individuals who cause it? Or is a better approach saying it’s the leadership in general creating a negative and toxic culture? How effective are these conversations really? Trying to assess if there’s any point in bringing this up. Obviously HR works for the company and an employee sharing their thoughts on the unsupportive, cold leaders could bite me in the long run.

like

Some recovery now , but suspecting end of the week will be another hard drop . Some people may decide to recover pevious loses

uplifting

How important is the “about” section on your portfolio? I understand it’s the area where you can show a little bit more than work, but is that something we should give attention?

like

Trying to decide on the Sheraton Kauai Resort vs Westin Hapuna on big island - has anyone been to both and can compare? Will be 5 days. Interested in best beach, resort, platinum benefits. Thanks!

like

Does it look badly on a referrer if the person who they referred either isn't a good candidate or chooses not to take the job if they are?

like

Opinion: Giving legitimacy to conspiracy theorists by providing them with a platform is incredibly irresponsible and selfish.

like

False 498A filed by my wife. Case moved to court recently. Can I get on site? Will it problem to get Visa?

like

Anyone have any thoughts on In Re Grand Jury that SCOTUS just agreed to hear? It's a tax case, sure, but the implications of A/C privilege in mixed legal-nonlegal communications seems huge.

like

Fertility clinics are asking to sign intake forms that waive court trial and only agree to arbitration. Is this normal? I reached out to a few and they all require it.

Is there a body in your geographic area regulate CTE Programs, such as through an approval or accreditation process? Do you feel that they’re supportive or just compliance gremlins?

like

I can't stand whiny recruiter posts on Linkedin.

like

How to pay 0 tax on 20LPA package?

Any suggestions.

like

Additional Posts in Compensation

Just got an offer for 130k base. Does this seem low considering I have 3.5 years experience in management consulting? Living in a Tier 2 city.

like

Dumping 20% of my paycheck into the Roth 401k. Gotta take advantage of my ultra low tax rate my first year. Taxation is theft.

like

Is 175-190 a reasonable range for Big 4 M2/M3 with 7 YOE Tech Advisory, LCOL city?

like

Can't wait to work on weekend. Super pumped!

like

A recruiter asked me what my billable hours were to negotiate salary for an industry position. Weird right?

like

Probably not the right bowl. I have $240k in my savings account, recently became a father of 3 and my wife left her job so now one income. I make $215k base. Monthly expenses prob around $6.5k including my mortgage. Home equity somewhere around $200k. I've never been good at investing (always losing money in the market). Want to move to a bigger home but don't want to lose my cash cushion. How can I conservatively grow my net worth? Vague question but any help appreciated. BTW I'm 33.

likeupliftinghelpful