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Best option for $20K home reno loan?

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Hi All, 


My house needs a $10,000 sewer line replacement.  At the same time, I'd like to add a basement bathroom.  Total cost about $20,000.  I'd like to do it in October, it is a good time for both me and my tenant.  

I usually have the income to pay for this out of pocket, but have taken an income hit during the pandemic.  

The basics: 
* FICO 08 credit score 783.  
* I have $500,000 in personal credit card credit lines.  
* I'm using $52,000 in personal credit card credit, all in low interest balance transfers.  Has been a stable number for 9 months, and has fluctuated between $30K and $55K for 5 years.  
* A year ago, with only $40K on the credit cards, I was getting balance transfer offers on most of the credit cards.  Now with higher utilization and risk=averse lenders, it's only Discover, FNBO, and an occasional promo interest rate on purchases from Citi. 
* So I don't think I should run up the total credit card debt from $50K to $70K, as I don't want to scare off these last three banks.  Or, worse, trigger account reviews from any bank that might cut my credit lines.   
* I haven't filed taxes in 3 years (landlord, easy to be lazy).  
* I have plenty of equity in this house and another house, but called one trusted mortgage broker about a line of credit without tax documents, and he said that since the pandemic/recession kicked in, all of their revenue-only based loan options have dried up. 

Short of filing income taxes and taking out a proper line of credit, what are my options?  

I've never done a personal loan, I often get snail mail offers from various outfits saying "consolidate your debt, up to $50,000K in a low-interest loan.  

A quick look at recent snail mail shows 
* "SoFi", 13%, appears to be unsecured.  
* "FIGURE" 4%, HELOC.  
Interest rates aren't a huge deal, as I should be able to pay this off in six months.  

Just curious if anyone has any offhand info on unsecured lines of credit for this sort of situation -- 
* Which lenders offer good rates? 
* The utilization won't apply toward my total credit card utilization, which I like.  Any other issues other than a standard "new loan" ding on a credit report that I should be aware of?  
 * Anything else that I'm not thinking of?  


Thanks in advance, 

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1 hour ago, moneypyts said:

So I don't think I should run up the total credit card debt from $50K to $70K, as I don't want to scare off these last three banks.  Or, worse, trigger account reviews from any bank that might cut my credit lines.   

I don't see going from 10% to 14% overall utilization as setting off any major alarm bells. Just don't come close to maxing any one card.

I might be struck dead after typing this, but you might also consider opening up a couple of low-interest credit union cards.

Whatever you end up doing, I'd add a second phase to the plan that eliminates the balances you are perpetually revolving.  And file your taxes before the IRS starts filing substitute returns for you.  The fees and penalties for not filing are piling up.

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I'll suggest that given the nature of the expense, it's best to take an installment loan vs relying upon promo rate credit card bt's, provided you can secure an attractive rate.  Given your stated FICO score, that shouldn't be a problem.


As I have in other threads, I'll put in a plug for Lightstream lending (it's an online-only lender that is a subsidiary of SunTrust, now part of the merged entity Truist.  My understanding is that they now extend loans nationwide).   I'm half-way through repayment of my second loan with them, a $22k 3-year loan at 6.14%.  All aspects of the loan application and distribution were clean and simple.  It's been a sterling experience.


Current quoted rates for a 3-year home improvement loan (personal, unsecured loan) are cited as low as 4.99% (I was assigned the lowest quoted rate in my loan approval).  Other loan terms are available, with a rate as low as 7.99 cited for a 7-year term.





eta:  as a footnote, the significant revolving balances that you've been maintaining, while admittedly at limited cost, pose a considerable refinance rate risk (as you may now be discovering).  If you really do expect to be able to repay the sewer/bathroom addition cost within 6 mo., you may wish to consider using this loan as a tool by which to reduce the rate risk the outstanding revolving debt poses:  look at the prospect of taking out a longer term installment loan (I suggest 3 years is a sweet spot in terms of rate), and use any short-term liquidity to significantly repay your revolving debt balances.

Edited by hdporter
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I caution you about your level of perpetual revolving debt. It's fine at 0% when times are good, but it's a ticking time bomb when you can't roll it over or something happens like COVID. I was running the same game for a couple of years before it bit me in the ass. You can't dodge the piper forever. 

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