Trying to get out of Personal Loan Debt

Submitted by Low-Ad1977 t3_11d1l80 in personalfinance

Hi,

I am trying to get out of debt, but I haven't found a great solution and am hoping someone wiser on here might have some ideas. I am 26; between the pandemic and emergency spending I have found myself in quite a pickle. I currently have about $30,000 dollars in unsecured debts (personal loans (70%) and Credit Cards (30%)). While I am paying over minimum the loans I have have horrible interest and almost none of my payments go towards principle. I can't get approved for a consolidation loan due to the high revolving credit and I had to buy a new car (My old car was totaled).

I can make my payments so I feel like debt relief companies or bankruptcy is a bit much, but I feel like I will never be able to pay this off and get ahead. I am currently applying to part time jobs to try and bring in additional income. I make salary $55,000 a year. So after tax I bring home about $3,000 a month. I split rent so that and utilities is about $750, Car Insurance is $170, Car Payment $600, Groceries/Misc. $400. Everything else goes to paying off my debt. I really wasn't planning on having to buy a car so soon into my post grad career and certainly not in this market so that has really thrown a wrench in my ability to get these debts down. I don't have any family or friends that can help so that is all I have to work with.

Are there options for people like me? I budget the best I can but with the cost of living increasing so dramatically over the past 6-8 months, I feel like I am falling behind. I am literally throwing everything I can a month to my debt problem but my balances aren't budging, so if there are other options besides debt relief or bankruptcy please let me know.

Edit: I would like to clarify that the car was not a luxury purchase. I drive all over my state in the USA for work (Georgia) sometimes up to 150 miles one way, I needed a car that was reliable and I could get quickly, as I would lose my job without a car. All the used cars in my area were highly inflated and some older cars in the same make and model of my car actually cost more than a new one. I bought the cheapest compact suv (I drive in very remote rural areas and needed something bigger than sedan) that was on a lot in the state at the time I needed it. It’s literally a 2022 Chevy trailblazer, the base model. It’s $24000 dollars on a 3yr loan. Almost every car I looked at was at least 8-10 grand over MSRP. I know it seems crazy but this was the best deal I could find with the time constraints and available inventory. If you didn’t have to buy a car during the pandemic I’m so happy for you because it was truly horrible and I wouldn’t wish it on anyone. Some jobs and locations require you have vehicles and it’s not a lifestyle choice.

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weiner_forest t1_ja6dyhc wrote

First step is to stem the bleeding. You going out and buying a new car requiring a $600 payment says that you're not doing that. Lifestyle needs to drop, quite drastically, before you're able to make significant principle repayments.

Other than that, you could try to call up the creditors and ask them to reduce your interest rates. Then make minimum payments on all but the highest interest rate, which you throw every spare dollar you can at. Also, get rid of the car and buy a junker (or take the bus), and call the negative equity lost your stupid-tax.

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t-poke t1_ja6gmgx wrote

You may have needed to buy a car, you didn’t need to buy a car with a $600 payment.

Sell it if you can and buy a much, much cheaper car.

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Low-Ad1977 OP t1_ja6usf5 wrote

Replying to t-poke (#2,046,511)

When my car was totaled I couldn’t get it repaired and I drive literally all over the state for my job and used cars were heavily inflated. Like cars same make and model were actually more expensive then a new one. Before this vehicle I never bought new but my circumstances were very different and didn’t have the luxury of time to shop around to find a good used vehicle and as I drive so much I needed to make sure it was a quality car and wouldn’t break down after purchase. Trust me I didn’t want the payment and still don’t but I had to buy a car to keep my job so I did what I had to do.

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Low-Ad1977 OP t1_ja6utgr wrote

Replying to weiner_forest (#2,046,002)

When my car was totaled I couldn’t get it repaired and I drive literally all over the state for my job and used cars were heavily inflated. Like cars same make and model were actually more expensive then a new one. Before this vehicle I never bought new but my circumstances were very different and didn’t have the luxury of time to shop around to find a good used vehicle and as I drive so much I needed to make sure it was a quality car and wouldn’t break down after purchase. Trust me I didn’t want the payment and still don’t but I had to buy a car to keep my job so I did what I had to do.

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weiner_forest t1_ja8iuty wrote

Replying to Low-Ad1977 (#2,049,231)

You have a job that requires you to travel up to 300-mile round-trips where they expect you to use your own vehicle and only pay $55k for someone with presumably a college education?

If they're not providing a company car + gas, or reimbursing mileage, you need to find another job ASAP. The IRS government reimbursement rate for business use of a personal vehicle is $.655/mile. If I conservatively assume you are doing 100-mile round trips daily, that's something like 2,000 miles a work-month or $1,310 after-tax that you're being shorted if you're not being reimbursed. If that's the case, no wonder you're falling behind.

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