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Query on Consolidating Loans/CC Debt A Red Flag To Lenders

Date: Tue, 10/17/2006 - 12:45

Submitted by anonymous
on Tue, 10/17/2006 - 12:45

Posts: 202330 Credits: [Donate]

Total Replies: 3


I am trying to help my girlfriend (future fiance & wife). She has been building debt and needs help getting out of it. We live together and rent an apartment. We have applied over the phone for a loan from Wells Fargo Financial. We are going to meet with the local credit union. I am not sure what the best route to take is that will keep her credit rating somewhat in tact (i.e. not put up a red flag that she has consolidated). I don't want her problems to affect our ability to buy a house in the future. Here are all of her debts:

School Loans- $40,000
Car Loan- $9,100
Credit Card 1- $9,405 at 22%
Credit Card 2- $1,400 at 21%

Now Wells Fargo Financial has offered a 6 year loan with minimum payments of $427 per month at 13.48%. That would include the car and both credit card loans.

We have budgeted to be able to afford a loan payment of $800 a month so that length of the 6 year loan would basically be cut in half.

I am not sure who to ask about what we should do. The Wells Fargos and CitiFinancials are out to make money. I have also heard that going to Credit/Debt counseling shows up on your credit report. I also have heard that if she were to consolidate with Wells Fargo that would also look bad to future mortgage lenders.

PLese help!
Thank you,


Consolidation program is not a negative thing in your credit report, if you do it. The best thing to your credit would have been if you paid the debts on your own. If that's not the option in your case, you will have to keep your account current and avoid defaults in the future. So, consolidation actually helps in repaying your debts. This is good thing than being in defaults. It stays in the credit report as long as you are in the program. Once the plan finishes, it's taken off from the file. If you are doing this, go for it. You will be taking care of your credit in the long run.

Regarding the loan, I think you should shop for some more companies in your area and compare the deals. You can visit your bank and the local credit union also.


lrhall41

Submitted by weeswie on Tue, 10/17/2006 - 13:10

( Posts: 382 | Credits: )


Thanks for the reply. What we have ended up doing was going to our local Credit Union- wow what a refreshing place that was. Ended up switching our checking and savings account.

As for the debt:
We got a credit card from the credit union that offered 8.99 on cash advance. So we cash advanced the $1400 at 8.99. Then I got one of my CC to offer me a 3.99 for 12 months on a balance transfer and we transferred the $9,400. If we don't have it paid off in a year we will do another cash advance at 8.99 since that is fixed.

The credit union was a nice place to be.


lrhall41

Submitted by on Tue, 10/17/2006 - 16:15

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I think you should consider a consolidation program instead of taking a new loan for paying off the debts. When you take a new loan, you will be actually multiplying your rolling expenses. Besides, you will pay the interest twice for different debts. Consolidate your debts under one payment plan and pay them off with your monthly payments. Life remains easy without any kind of loans.


lrhall41

Submitted by weeswie on Tue, 10/17/2006 - 16:33

( Posts: 382 | Credits: )