Diving in head first

Sometimes, the only way to do something is to dive in head first. No blind spots. No looking back. Just go. As some of you may know, one of my new year’s resolutions was to save money. And because of my debts I find it rather difficult to save said money. So today, I grabbed the bull by the balls and went to my local bank advisor and enquired about a consolidating loan.

I have never felt more responsible. As I sat in his office, with him tapping away at the keyboard, I was a nervous wreck. With a loan, once you make a payment you can’t access the funds again which is very different to how I’ve been dealing (or lack thereof) with my debt. As long as I had a balance that’s high enough – even if I continue to made payments towards it – I would spend whatever credit I had available.

So I figured that the best way to finally get rid of my debt was to get a loan that will help me pay off my credit cards, laptop, and personal line of credit. It wasn’t an option to simply increase my personal line of credit because then I would still be able to spend the money again once I earned some credit back by making payments. Anyway, after my oh-my-god-I’m-never-going-to-get-out-of-this-debt- I’m-having-a-panic-attack-can’t-wait-any-longer stint of waiting, he finally reported that the automatic approval didn’t go through so he would have to send it through manually (this could take 2-3 business days). Great. More nerve-wracking waiting. “Oh ok.”

If I get this loan, I will not only need to make lower payments per month but I will be able to plan my finances better. The only thing I need to watch for is racking up more charges on my credit card. I do need to keep a credit card for airline tickets and other such online purchases, but I need to watch my spending. This should be a little easier because while I was living in Ireland I had to get a credit card, but Irish banks give you the option to have your entire balance due at the end of the period – an option he made me promise to chose. And I’m glad he did because this has trained me a little bit in paying attention to my credit card balance in mind when I’m spending actual cash.

I know what you’re thinking, “Why couldn’t you just do that with your credit cards now instead of getting a loan?” Because my balances had gotten out of hand, and I just couldn’t keep up with it. And because the balances were so depressing, I usually ended up spending more (money I didn’t have) to cheer me up. It was quite the vicious cycle I had gotten myself into. I really hope I get this loan so I can get a fresh start with my finances – even if it is later than I should have. I was “hmm’-ing and “huh”-ing about whether or not to gethe loan because every application you make to a lending institution lowers your credit score… but heck, it’s better late than never!

responses to “Diving in head first” 13

  1. Pingback: fragileheart.com | journal | You’re not missing a thing… » No catchy titles here, new year’s resolutions are tough to keep.
  2. Peri – I’ve actually been considering getting the loan for a while now but had to give my credit a little while to go up so that it didn’t hurt my credit score. You see my bank is so good, they even encouraged me to check my credit score on my own first before they made an enquiry. They explained to me that each time you apply for a loan or credit card they deduct points from your credit score… but that if you check your score on your own through equifax (only in North America) then there is no penalty against your score. It was a really good tip!

    I can’t wait for that feeling Peri… I forgot to call them on Friday to follow up so I’ll have to wait until Monday! I’m pulling my hair out!!

  3. I’m glad that you’ve recognised the problem though and you’re making an honest effort to get out of it. Getting out of debt takes at least 3 times longer than getting in. When you get out, the liberation you feel will be something that you’ll remember forever. You’ll think twice about buying things on credit after that. Believe me, I know.

    One thing that I didn’t know: Applying for credit lowers your credit score. I wonder why? Having credit that you manage responsibly actually improves your credit score. The only way you can get credit is to apply for it…

    Periapex’s last blog post..Deconstruction of an Apicoectomy.

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