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To Loan Or Not To Loan


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Currently I have no more negative items on my credit report thanks to the folks here on CB and im working on trying to get my score up so I can look to get a home soon. I have about 4 thousands in debit among all my credit cards. I was wondering if it would be a good idea to take out a small personal loan either from my credit union or I heard about Lending Club or similar and get a lower interest rate and pay off all my cards and make on payment to the loan.

 

Would this help me or hurt me.
I thought this would help by showing low utilization on the cc's and also show a positive trade line as a different type since It is a loan.

 

Suggestions , Opinions , Options all welcome.

 

 

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I'm in a similar situation with similar balance but decided against it considering even if I can pay the personal and temporary help with the zero utilization (or say 1%) to boost the FICO, the interest on the personal loan for me is too high and didn't want to take that risk.

 

My balance is around $5,500 in store & credit cards so decided to aggressively pay it down.

 

Personally if I were you and in a position to be able to pay down the debt quickly then I would go that route.

 

I guess it depends on your current FICO and what kind of rate you would get to justify the personal loan? If your score is good of course I would talk to a local CU to get a better rate.

 

Personally if I were you and in a position to be able to pay down the debt quickly then I would go that route.

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4k is not a huge amount on credit cards unless you have low credit lines. What are your FICO scores?

Not sure of my actual fico however CK say its 650 which im sure is way off.

the only thing hurting me is the utilization. I do have low limits on my CC since I am rebuilding everything. my score was low 500's last year this time now I have nothing bad on any of my reports . unfortunately I live paycheck to paycheck and paying down the CC's quickly really isn't a option. I pay all the bills on time but never seem to it much lower. 100 here 100 there doesn't really make a dent.

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IMO

 

Considering that youre living on credit, getting a personal loan to pay off that debt, opens you up to more debt.

 

it takes strong resolve not to run up the balance again once its paid off with credit money. Personally, I wouldnt recommend it unless youre disciplined. I am getting there myself. It can be tough at times.

 

Good luck either way

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4k is not a huge amount on credit cards unless you have low credit lines. What are your FICO scores?

Not sure of my actual fico however CK say its 650 which im sure is way off.

the only thing hurting me is the utilization. I do have low limits on my CC since I am rebuilding everything. my score was low 500's last year this time now I have nothing bad on any of my reports . unfortunately I live paycheck to paycheck and paying down the CC's quickly really isn't a option. I pay all the bills on time but never seem to it much lower. 100 here 100 there doesn't really make a dent.

 

 

 

If you're living paycheck to paycheck buying a home probably wouldn't be a wise thing to do at this time.

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True, but what about money for a downpayment and closing costs? What happens when the AC breaks in the first month?

 

I wouldn't advise applying for a mortgage if you are living paycheck to paycheck. Get your budget and finances in order while you snowball your debt.

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True, but what about money for a downpayment and closing costs? What happens when the AC breaks in the first month?

 

I wouldn't advise applying for a mortgage if you are living paycheck to paycheck. Get your budget and finances in order while you snowball your debt.

+1

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Mortgage payments are usually lower than rent payments. A much better deal, especially if you're handy around the house. Rent payments are somebody else's mortgage payments.

 

True in much of the country. But, I rent out one of my two homes here in So. Cal., it's a 3 bedroom and small (996 sq. ft.). I charge $2500 a month and it could sell for 550k. My friend just bought a two year old home near Austin, TX for 290k and it's over 3000 sq. ft., huge pool and the lot is over 7000 sq. ft. His mortgage is around $2200 a month.

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Haha you cannot compare any area of the country to SoCal when discussing housing. Here, it would be cheaper. AC breaks? I guess it depends on what breaks - a fan motor? or the compressor? Usually a landlord gets enough in the rent to cover repairs and maintenance. but it varies from one area to another and from one circumstance to another.

 

I always get some independent sole proprietor for repairs. He's not under any pressure to red tag things so the sales department can take over. :D If I need a fan motor, or a new pump, that's all he does. People like me are his bread and butter. :D

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Haha you cannot compare any area of the country to SoCal when discussing housing. Here, it would be cheaper. AC breaks? I guess it depends on what breaks - a fan motor? or the compressor? Usually a landlord gets enough in the rent to cover repairs and maintenance. but it varies from one area to another and from one circumstance to another.

 

I always get some independent sole proprietor for repairs. He's not under any pressure to red tag things so the sales department can take over. :D If I need a fan motor, or a new pump, that's all he does. People like me are his bread and butter. :D

I'm moving to Las Vegas next month. I have a job lined up with a salary slightly lower than what I'm making now. I'll rent a great two bedroom townhouse for a year and buy a huge home for about 180k that would be close to 900k in So Cal.

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