'Refinancing' debt - need advice!

iVillage Member
Registered: 11-21-2003
'Refinancing' debt - need advice!
12
Wed, 09-08-2004 - 11:02am
Hi there,

I think I need your opinion on this one: I have one bank account (my only one) with an allowed credit line of 3.500. I often, oh so often ditch below that. My account has been in the reds for years now.

Now I started thinking: How about refinancing, sort of? I pay an interest of 12,5 % for the allowed credit line, and something like 16 % for anything beyond that. I could get myself a regular credit (or is the word: loan? I plan to borrow money from my bank and pay it back in regular chunks, that's the jist of it...) at 8.9% nominal (that's 10% effective) fixed interest. Is it sound reasoning to go for that, or do I cheat and lie to myself when I see it this way?

Your opinion?

Thanks, Jordis

ivy_jordis

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Avatar for zaboz
iVillage Member
Registered: 03-26-2003
Wed, 09-08-2004 - 3:59pm
I guess your accounts work a little differently, so I'm sorry if I'm misunderstanding.

If you take out a loan from your bank to pay off the line of credit, will you close the line of credit? Have you been paying off the line of credit and then recharging it back up?

You would definitely save some money by refinancing, and if it's a loan it might not be so easy to access the credit. But if you don't close that credit line too, you might be tempted to charge it back up!

iVillage Member
Registered: 05-30-2003
Wed, 09-08-2004 - 4:50pm
I think I'm confused-is this like a checking overdraft? Or like a Home Equity line of credit?

Are you using it as a safety net to prevent overdrafts, or as 'free' money (I can't think of what I'm trying to say...)or like an emergency fund?

I think that it might be your best bet to get it current and close it once you chunk some money into a separate emergency fund. It sounds like a credit card, kind of. Is there anyway that you can make getting it current top priority on your snowflake list?

I'm never a big fan of paying bills with home equity. We took out a home equity line of credit one year after our tax bill was MUCH higher than expected. I didn't like the feeling of knowing that if we screwed up our house was at risk. That's just me, though. I think that it would probably be OK if the underlying behavior was changed.

Good luck with what you choose-

Lisa

iVillage Member
Registered: 11-21-2003
Thu, 09-09-2004 - 12:08pm
ooops, seems like our systems really work very, very different - I don't even know how to explain so you really understand what I try to say... :-)

I planned to ask the bank to close down my credit line, so that I cannopt borrow by digging into that any more. It is no home equity loan - since we do not own, but rent.

Thanks for the advice about REALLY preventing myself from building up that deficit in my account again - temptation might be there, so I definitely will close down that credit line!

Went to three banks today and asked for an 'offer' - they make money out of this, too, so maybe I can find out the bank that offers the best bargain (aka: lowest interest rates) for me... now this evening, my husband and I will start to compare and calculate. *sigh*

Greetings, and thanks again for your wise words,

Jordis

ivy_jordis

iVillage Member
Registered: 05-23-2004
Tue, 09-14-2004 - 12:50pm
Cut it out, Tammie. These boards are not to promote your company.
iVillage Member
Registered: 06-18-2004
Tue, 09-14-2004 - 1:16pm
Thanks. I thought I was the only one who was bothered by the poster you responded to. Am I wrong or is the board supposed to support us in our efforts and provide some answers to questions and give ideas to get out of debt, or is it for every "debt managment" company out there to have another forum to get customers? This is the first posting like this I have seen and hopefully, it will be the last.

kellie

iVillage Member
Registered: 05-23-2004
Wed, 09-15-2004 - 8:55am
Thanks for letting me know it bothered you, too. I didn't want to come off like the Wicked Witch of the South, but, man, oh man, did that burn my biscuits!

I can't say how much I appreciate the fact that those posts (3 from same person under 3 difference discussions on this board) have been deleted.

I appreciate the fact that our community leader was quick in "nipping it in the bud".Hurrah! The boards are safe and relatively sane! Cool.

This is the last place we need to be solicited. I'm fighting my debt and trying to get finances in order which puts one in a vulnerable position. I don't want to feel like anyone's "easy pickins'".

I love these boards!

Hard-to-swallow advice? Yeah, okay. Sometimes the truth hurts, but it's still the truth (like you can't buy everything you want). But, solicitation? No way. Not here.

These boards are a refuge and a wonderful source of advice, and yep, comfort, too. Thanks, everyone - for the wise and worthy words over the last several months. Wow!

One more time, kudos to our community leader for not tolerating these kind of messages on the boards.

Avatar for akirez
iVillage Member
Registered: 03-26-2003
Wed, 09-15-2004 - 12:24pm
In the future, use the "report a violation" functionality when you read such messages. It will allow them to be removed more quickly. I did this yesterday when I read those spam messages on this board and others. There's not need to reply to them--just report them! Happy posting!

Akirez

Avatar for zaboz
iVillage Member
Registered: 03-26-2003
Wed, 09-15-2004 - 12:38pm
Well, I'm glad her message were removed, but now she's spamming my

private email address!!! Grrrrr, I hate these people!
Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Wed, 09-15-2004 - 6:27pm

She is???


I had recently found out that you can report her to ivillage for that and they can deal with it.

iVillage Member
Registered: 05-30-2003
Wed, 09-15-2004 - 8:35pm
Mine too! I deleted it because I didn't know what else to do with it.

I didn't know where to register my complaint-

I think I have the 'debt-snowball' thing under control, LOL.

Lisa

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