Personal Loan for Debt Consilidation...

HollaGeo · #1 (**permalink**) 07-01-2010, 01:23 AM

This post might be kind of long. It's gonna be a good read though...

My wife and I got married in 2008 and bought our house in 2008. We have accumulated about $30,000 in debt. The majority of the debt is house-related purchases. The two credit cards that hold this debt have been cut-up.
My wife has really good credit. Our mortage is under her name and she is the primary account holder on one of the credit cards that holds our debt. We are both healthcare professionals (Nurses) and make well into the six figures.
We sat down the other day and decided to apply for a personal loan to pay off these cards in a set amount of years. We went to TD Banknorth and she filled out an application. We figured mine as well go for the full amount that TD Bank lends ($50,000) and pay off the car loan as well. The monthly payment for $50,000 would be give or take $1,000 a month for five years.
The next day I get a call from the bank saying she didn't get approved because there is no history of this kind of loan on her credit history. The gentleman asked me why I don't add my name to the application. My situation is I filed Chapter 7 back in September of 2007. However, since then I have re-built my credit and my scores are in the mid to high 600s. I am also working closely with Lexington Law to further approve my score and remove as much negative items as I can.
Today (6-30-2010) I went to TD and added my name to the application. Figuring, my Chapter 7 was three years ago and my credit has been flawless since then. I even spoke to the North Jersey underwriter personally on the phone. Basically, telling him that TD can write the checks to the credit card companies to pay them off in full. Let's say we don't get approved for this loan, as one of the employees said TD is the most strict when it comes to lending out money.
My question is; what banks are a "less-strict"???

*We are both healthcare professionals making combined $170,000 a year.
*We have a mortage and never had a late payment.
*We pay all of our bills on time.
*Wife has good credit.
*Mine is being correctly re-built and is documented in my credit reports.

DavidBibby · #2 (**permalink**) 07-01-2010, 01:44 PM

HollaGeo,

First I'd like to applaud you for cutting up the credit cards. Now I don't know of a "less strict" bank, and every bank has their own philosophy and rules when it comes to lending.

In my opinion, you should not consolidate. It's been my experience that when you consolidate, it gives you a little bit of "breathing room" in your budget, and that tends to make people relax and spend more. Even if you lower your rate with a consolidation, the term of the loan is often longer and you actually spend more.

The alternative... is to put together an aggressive debt elimination plan. I recommend following a plan as described in the book "The Total Money Makeover" by Dave Ramsey.

I don't get anything for my recommendation. But if you've never heard of Dave Ramsey before please visit his website.

He is strongly against consolidation loans and he gives a compelling argument against them.

HollaGeo · #3 (**permalink**) 07-08-2010, 01:20 PM

Dave Ramsey is a gazelle like moron.

DavidBibby · #4 (**permalink**) 07-08-2010, 11:17 PM

HollaGeo,

I guess Dave Ramsey was right... you either love him or you hate him. It seems you have a very strong opinion about him so I'm not going to try to convince you to change that.

Good Luck on your loan consolidation.. I truly hope you find a bank that will overlook your chapter 7.

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