I’m 28 and made a huge mistake. Took out a personal loan for what I thought was a solid investment, and it completely flopped. To make things worse, I had someone who was supposed to cover half of it, but now they’re nowhere to be found.
At the end of the day, it’s my mistake to fix. Here’s what I’m working with:
My take-home pay is about $3,500 after taxes. The personal loan interest is insane, and by the time I finish paying it, I’ll have forked over another $30k in interest alone. I also have $10k in credit card debt due in December, but I’ve got $8k in savings that I plan to put toward that.
At this point, I’m seriously thinking about Chapter 7 bankruptcy, which sucks because I’ve worked hard on my credit since I was 18. My score was 820… goodbye to that.
Anyone got advice on how to dig out of this? My goal is to be done with this mess in 2-3 years if possible. Appreciate any help.
If you’re looking for credit counseling, stay far away from for-profit companies. They exist to make money off you, not help you.
Check out the National Foundation for Credit Counseling at www.nfcc.org. They’re nonprofit, legit, and will actually work with you based on your income, often for free or very cheap.
@Whitney
Nope, it was just a verbal agreement with someone I considered family (lesson learned). My score dropped to 790, but I’m guessing if I pay off my credit card, it’ll go up. I already tried to consolidate my loans, but I got denied.
I know taking out another loan sounds bad, but I’d go to a credit union and apply for a personal loan. Your credit score is still solid, and you could refinance at a way lower interest rate (probably 7-9%).
Even if they don’t approve the full amount, anything you can move to a lower rate will help. Every little bit saves you money in the long run.
You’re in a rough spot, but this is totally fixable. You’ve already broken down your budget, which is a great start. Get even more detailed—track every dollar and cut where you can. Even small savings help.
If you can, pick up a side gig. Restaurant serving can bring in decent cash quickly. Anything extra should go straight to paying this down.
It’ll take a couple of years, but if you stay on top of it, you’ll be out of this by 31-32. Don’t stress too much, you got this.
@Emerson
Appreciate all the advice! My score was 820 before this mess, so it sucks seeing it drop. I’ve always been responsible with credit, but all it took was one bad moment to screw it up. Hoping to recover and maybe hit 850 one day
