Hi, right now I have 2 high interest rate loans, 1 is at 36 percent, and I owe 5800 on it. And the other is 22 percent and I owe 11000 on it. Loan one costs 254/month and loan 2 costs 345/month. I've tried applying for debt refinancing but have been denied. Currently I'm trying to decide whether if I should focus on lowering credit utilization to try and fix my credit score or should I be focusing on paying down the high interest rate loans? I also have a 2nd car that I could sell for $4-5k that should pay off most of loan 1. What is the best way of approaching these high interest rate loans? #personalfinance
open 0 apr credit card and use balance transfer
Do you think op will get high interest loan if he had an option of opening a credit card?
yes maybe op has cash loan who knows. I got 5000 cc line with 650. Maybe op can apply for few cards at same time. Thats how i get few cards during unempoyment before hard inq appears on it.
How critical is that second car? If manageable without it I would totally sell and pay off loan 1. 30% is outrageous interest to flush down the toilet every month.
I don't really need it. My primary car has been more fuel efficient, just passed smog and has so far been very reliable. Just has an AC leak
Pay off loan 1. Then apply what you were paying on loan 1 to loan 2.
All of the above and do leetcode and prepare for interviews
You work for Intel. Can’t you just pay off or aggressively pay off the loan. 36 and 22 percent are insane interest rates. You should be paying off these loans before any non essential expenses - only food, shelter, transportation and health should be necessary expenses. Food - you cook at home, no restaurants till you pay them.
I'm just a contractor for them. My TC is 68k/year. I agree with your advice, I need to avoid eating out from now on
As someone said above, pay off the high interest loan first. In the meantime, make sure you are paying minimum on the order too. Best wishes and great to see that you are taking steps and advice to move away from these high interest loans.
What’s your location and what do you pay for rent ?
San Jose, and I pay 1k/month
Reasonable rent. Sell the second car and pay off your first loan. Aggressively pay down the second one from your paycheck. Other than essentials, you shouldn’t be spending anything more. Maybe get a second temp job for 6 months. Those interest rates are insane.
Whatever makes it so you waste least amount of money on interest is the best.
How did you get in this situation ?
Sell the car, pay off 1st loan as fast as humanly possible with every last penny you can spare each and every week and then move onto the 2nd loan. You got this.
Age and Net worth?
25 and 0. I don't have any investments. My TC is 68k/year
Would strongly recommend against getting any debt, especially high interest debt, unless absolutely necessary or you have a high NW What did you use the money for?