163

Can I be debt free or should I file bankruptcy There's no reason to file bankruptcy with $64k in debt and a $80K net salary. You can get out of debt in 1-2 years if you're willing to sacrifice. The harder you sacrifice, the less time it will take. Please advise me how to reduce my debt. Stop creating any more debt. Cut up all credit cards Put $1,000-2,...


121

You need to change the way you think. First, understand compounding. Not just intellectually, but viscerally. You need to develop an aversion to spending borrowed money. A debt with 22% APR doubles every 38 months. Every dollar you pay down your debt, cuts the total length of time you will be paying that horrible interest. Every $1 you spend now ...


53

My income is 78K to 80K after taxes and insurance. I pay $1,500 for rent+utilities, $150 for phone bill, $450 for auto loan, $300 for auto insurance (for two people; I am helping a friend who can't pay auto insurance), $750 for a personal loan and $750 to $1,000 for credit card. I also need to send $100 to $200 to my home country. Total monthly expenses ...


25

One thing that I don't see addressed in the other answers is this: I am helping a friend who can't pay auto insurance You MUST stop this. While I understand, and applaud, the desire to help a friend, you are not in a financial position to do this. An analogy is a toddler who wants to help carry in the groceries and tries to carry in a gallon container ...


14

Loan repayment can't be tax deductible except for home loan. If the home loan for first house is taken from close friends and relatives, it has the same tax benefits as if taken from bank. The rate of interest in such cases can't be more than prevailing market rates. Your friend has to pay taxes on interest income. The numbers don't add up. On your income ...


12

The tropes that got you here There's a core pattern of thinking that drove you here. It is a well known trope, and it has already made you a debt slave. Now, whilst in the middle of it, you must realize what happened and make course corrections. Otherwise this will be your life. Indeed, bankruptcy is the next step in the ever repeating cycle, so the ...


10

As part of the loan approval process your friend will have to prove at two different times that they have a plan for the down payment, and they will have to show bank account statements to prove it. They will have to do this when they apply, and just before the settlement date. If they have a large sum of money being transferred into their bank account, ...


6

Welcome new user. If YOU are getting the loan money and YOU are PAYING the interest, you do not pay any tax. (You're not the one GETTING money.) Your friend is GETTING money, so your friend pays tax. It is income, like any other income.


6

Traditionally a bank makes money by lending out money. Their source of these funds is the deposits people make into the bank. There are risks with this business model. Some borrowers might not pay it back. The economy (local, national, or world) may collapse and significant number of borrowers may not pay back what they owe. The bad economy may also cause ...


6

This is a fantastic deal for the OP who truly has an extraordinarily generous friend. Note that monthly payments of INR 60K for 12 years add up to INR 8640K which is less than the INR 10000K that was borrowed. So, unless the OP is planning on an unmentioned balloon payment at the end of the 12 years, the loan will still not have been paid off in 12 years and ...


4

Anything you borrow for that down payment will hurt your ability to get the loan package you need. The lender doesn't want to see the borrower getting a loan for the down payment. They don't want to see a signature loan; they don't want to see a cash advance from your credit card; they don't want to see a loan from your 401K; then don't want to see a loan ...


4

Adding to the other answers...often are the small things that count and accrue costs. Having several bank accounts+CCs, especially with them charging maintenance on top of the costs because of being empty? Close all of them. Unless you want to diversify where you store substantial savings you do not need accounts in more than two banks. Having small vices,...


4

One is not always better than the other. I refinanced in the last few years, and I shopped around with different brokers (online and local) and banks. I found both brokers and banks that were very sketchy in regard to their fees, which was the main differentiating point (rates were more or less the same between them). There should be no risk in general of ...


3

My question is, assuming that I am able to verify that all the information I provided on my application was correct, in general, can decisions like being turned down for a loan be reversed, or would I have to reapply once they clarify what could not be verified? That is a question only the lender can answer. If their issue is fixable, then I have had ...


3

Does this scheme of securing a loan on the proceeds of a secured loan make sense at all or did he make something up Essentially he is saying that he has money and there isn't much risk for you. Getting the secured loan to start up assigned to you can be done... There is legal paper work that needs to be done. It still doesn't mean your risk is zero. ...


3

I don't know where you live in the USA; but when I lived in Toronto (which is NOT one the cheapest places to live in Canada) about 5-10 years ago, I found an apartment for about $750/month (rent and central heating included). It wasn't a popular neighbourhood -- an old and relatively cheap building near the edge of town -- the nicest one I could find in that ...


3

D Stanley has some good advice. I would only say: Don't sell the car unless/until you've very carefully explored all the pros and cons: net financial gain, total cost of an alternative vehicle or alternative transportation. You could end up worse off, or the gain may be too little to be meaningful. No need to destroy the credit cards, but hide away all but ...


3

You've asked (or implied) a lot of semi-related questions about how your finances will impact your loan costs. In order to answer them, it may help to step back and consider the bigger picture about mortgage decision making. Banks generally want to know four things when it comes to approving a mortgage loan: Is the property good collateral? A mortgage is a ...


3

However, since opening this interest-free credit account, I noticed that my credit score has decreased from "excellent" to "moderate/good". This is the only change in financial circumstance, and I'm sure it can not be caused by anything else. All other payments (credit card, mortgage) are up to date. Taking the above statement as true. How ...


2

You made a guess that you owe $5,000, and your ex-friend made a guess that you owe $10,000. It's quite obvious that you are both guessing. I assume you both want that you pay the correct amount. I suggest you find a trusted person who is good at using a spreadsheet. Then you start doing the numbers. You have a judgment that says you owe (some exact number ...


2

There is a very good subject of fully reserved banking. But a full-reserve bank doesn't need overnight government loans or might not qualify for government banking loans on their reserves. What would the government banking loans be for if the reserves are liquid ? And if the full-reserve bank doesn't get government banking loans then it could just be a ...


2

Expect that when they see your credit history they will want to know why you took out and paid off a small personal loan. The fact you have to explain it shouldn't hurt your application, but you should expect to have to provide in writing an explanation. The addition of the loan if it adds a different type of loan to your credit history can be a good thing. ...


2

Sending as gifts I found a clear statement that you do in fact owe gift tax for gifts made to foreign people (foreign from the perspective of the United States government). There is a $15,000 gift tax exclusion per person per year in 2019. That would be per parent, so you could send $30,000. If you are married, you and your spouse could each send that ...


2

In formal bookkeeping, liabilities is an obligation arising from a past business event and which has not yet been settled. Liabilities is the opposite of assets, which are the resources of the company that have been acquired through transactions, and [which] have future economic value that can be measured and expressed in [some currency]. An example of a ...


2

Private Loans both Owe and Owed. In my personal finance spreadsheets, I like to separate Loans (money that I've already borrowed) from Liabilities (money that I'm going to owe some time in the foreseeable future, like annual taxes, semiannual insurance payments, etc), even though that isn't the textbook accurate definition of Liabilities.


1

Now that we have already signed a contract, a question rised for me. Is it recommended to get mortgage from a bank or a private loaner? This is exactly the type of thing that should be done before signing a purchase contract. The typical purchase contract in the US has a short deadline for the purchaser to arrange for financing. There is no absolute ...


1

Generally speaking, the only loan in the USA that I know of that won't raise red flags with the underwriter is a 401(k) loan or similar. I would recommend highly against taking such a loan due to the compounding loss of growth (cost) such loans incur. You are free to take a personal loan at will, but keep in mind that a pre-approval is not cash in the bank, ...


1

Check out the interest rates and other terms. Lets look at it from a business perspective. For that kind of money, people normally go to a bank and get a great (now days) interest rate. So, who is the market for these guys? People who can't get a bank loan (people who are considered too risky for the banks). Risky people are more likely to have payment ...


1

To answer your question, yes. A joint credit card does show up in your credit report and does contribute to your credit score. This is because you are liable for the balance of that card and are responsible for ensuring it is paid. In general, joint credit cards are indicated as such on your credit report, so banks may know that it is a joint credit card. ...


1

If there are no early repayment penalties, you cannot make much wrong. 7.5% is quite high, but if you don't have credit history, that might be quite good. Back in 2008, I also took a loan for repaying my BAFöG (German mix of stipend and loan, issued by the government, 30% bonus if paid back at once). I don't remember the details, but I calculated a ...


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