This blog was only started 10 days ago, but we’ve been trying to eliminate our debt for a long time.
A little over a year ago, our debt was at $18,000, including my husband’s car. Our monthly payments were somewhere around $700 a month- just on our debt. We weren’t able to save any money despite the fact that we’re not natural spenders. We do spend money on our hobbies, but we’re not people who like to eat at nice restaurants and go to the movies every weekend. I rarely buy new clothes, and hubby usually only buys jeans and shorts when one pair wears out (shirts are generally birthday and Christmas gifts).
Just before we got married, I needed a surgery- and we didn’t have the cash to pay for it. So $2000 for the surgery, plus another few hundred for exams and medication really hurt us financially. We’d bought a $1000 van on a payment plan from my parents because we were planning on moving, and often had to haul things that didn’t fit well in our cars.
Up until the surgery, we were doing pretty well with paying down our debts. I’d recently paid off my car, the van was paid for, and we were both making a slow progress on our credit card debt. But that surgery really screwed us financially.
Eventually we decided to sell my car. We used that money to pay down $3000 of our debt.
When we realized that we still owed $15,000 it was a defining moment in our lives. How had we let it get so far? Of course, $3000 of that was his car, and $2000 was my surgery. Yet, it was still a rediculous sum for people who don’t have much to show for it. And that’s when we took the biggest step so far.
We spent weeks applying for consolidation loans. Some of these people were being absolutely rediculous in their APR! Several of them tried to charge us more than our credit cards charged! And they all said the same thing “I’m sorry. That’s the best I can offer you. It’ll still be paid off in 5 years, which is more than you can say about your credit cards.”. BS! Some of them I actually laughed at. That really seemed to annoy them.
Finally I came across a company that spoke to me as an actual human being (I’m pretty sure that I am one). It turns out that they’re loan brokers, not loan agents. He guaranteed me a rate 3% or lower than what these other companies were quoting me, and said he’d get back to me in a few days.
The man came through with a rate 6% lower than the other companies quoted me. Even with the brokerage fee, we came out ahead (it added 1-2% on to the total). Granted, he did keep trying to talk me into a higher loan (“You can use it for anything! Even vacation! It’ll only add…”), but was otherwise very pleasant to deal with.
It lowered our monthly payments by half, our credit rating has improved, payments are automatically deducted from our bank account (no forgetting to pay or having to write checks!), and we’ve already paid off 1 year of our 5 year loan.
It’s still not speedy enough for me though. I want that loan paid off in 3 years, not 5. And I want to build up a nice little nest egg too. But it’s a start!
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