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I am 27, newly married, with a 3 month old baby girl. Long story short, I am having a hard time finding approval from banks for a $ 3,500 loan to payoff some credit cards.

Now the long story:
Credit Score: 659
Debt/Income Ratio: 39%
Spouse: Horrible credit and stays home with the baby
GOAL: Remove credit card debt to build/improve credit score

My monthly payments for all credit cards is roughly $ 3500. I pay $ 250 a month in payments (some minimum payments others are larger than minimum). I have 2 cards that are true credit cards that consist of 50% of my CC debt. The others are department stores (sears, lowes, bergners, etc.) ** I am being told that department store cards kill credit scores because they are looked upon as impulse buys and result in buyer’s remorse.

Anyways, I am needing this loan to knock down my monthly payments from 250 a month to 70(ish) a month (3500 @ 8% for 5years).

I have been declined due to bad credit history (charge off in 2007), multiple late payments (from the chargeoff iin 2007).

Today I own my home, a car, and have not been delinquent on any bill, including Credit Cards, Never been late on my car note. Never been late on my mortgage. Never been late on any utility, cell phone, or the like.

Any suggestions, opinions, or “gtfo” you broke @ss full would be greatful. At this time any extra $ $ we can save would be great!!

5 Thoughts on How do I get approved for a loan to payoff Credit Card debt?
  1. Dan H
    October 31, 2011 at 11:29 pm

    Have you tried a credit union? They are sometimes more lenient on loans. Or the bank you hold your mortgage with?

    Agree to cut up all of your cards as part of the terms of the loan and not to apply for more cards for as long as your loan is in effect. Then, instead of making the minimum payment on the loan, pay the max you can each month.

    When you are done, don’t go there again. If you must have a credit card, pay off the balance every month.

  2. Judy
    October 31, 2011 at 11:36 pm

    Not going to happen. Getting an unsecured loan with really good credit is very difficult these days.

    And don’t get taken in by the scammers who will respond to you here……

  3. ?
    October 31, 2011 at 11:55 pm

    Given the enticing offers that some credit card companies make to keep their customers, it is very easy to accumulate loads of credit card debt without realizing the consequences until later. If you find yourself in this situation, obtaining a loan to pay off the credit cards could lower your monthly expenses and improve your credit rating.

  4. Alex
    November 1, 2011 at 12:25 am

    I agree with Judy – it’s probably not going to happen. It probably couldn’t hurt to apply at a credit union, but don’t count on it being approved (inquiry will stay on your credit report for 2 years). There are different classes of debt and store cards are the lowest category – take that to mean that you shouldn’t open more of those accounts, but closing the ones you have open now could hurt your score by reducing your credit limit (balance to credit limit ratio).

    Assuming you are not approved for a consolidation loan, review your budget and take a targeted approach to paying off debt so you can knock out at least one of the minimum payments. I like mint.com because it’s free budgeting tool that links to your online accounts, but you can also purchase software like Quicken – they take some of the work out of tracking spending and managing your budget. Targeting debt means making all extra payments to one debt to knock it out. Prioritize your debts, make the minimum payment to all but #1 on your list, put all extra payments to #1 until it’s paid off, then put what you were paying to it to #2. By paying a little extra on multiple debts, it never really feels like you’re making progress and it will take longer to get rid of one of those minimum monthly payments. Linked below is an excel template for free download where you can run scenarios of the order to pay off debt and see how quickly you can eliminate monthly payments.

  5. Ariel Aninon
    November 1, 2011 at 1:01 am

    Given the enticing offers that some credit card companies make to keep their customers, it is very easy to accumulate loads of credit card debt without realizing the consequences until later. If you find yourself in this situation, obtaining a loan to pay off the credit cards could lower your monthly expenses and improve your credit rating.

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