Sunday, July 8, 2012

No Loan & July Goals

The loan is a no go.

I had applied for a loan, with the intention of paying off debt. Unfortunately I do not qualify for a loan. I applied alone because I have a better credit score than my husband, as well as less debt. However, I learned this past week that my income is just too low. To get a loan I would need a co-signer. Since my husband can't co-sign that would mean asking family for help - not really an option for us. We really want to take care of our financial obligations on our own, without involving family. I can ask for less money (we wanted a $9,000 loan) but the banker I spoke with made the good point that unless the amount of the loan truly wipes out ALL of the debt and gives us a clean slate, it's probably not worthwhile.

I am completely new to the world of loans and had no idea what my chances truly were. I learned from the process. For instance, I had the bank explain to me in simple terms why I was denied. Basically they look at a ratio of income vs. obligations. Long story short my income is too low. My obligations include rent (the full amount - $850) because my name is on our rental lease, and my student loan payments. Banks want your obligations to be 40% or less of your income. In my case, I was over 65%. Too big of a risk for the bank. I also don't own anything (car, home, etc.) so there is nothing to make the bank feel secure in loaning money to me.

It is disappointing to be denied, only because we thought the loan was a great idea for paying off our debt. But we must move forward.

Here are my goals for July:

*Figure out how to afford paying for the children to fly across the country, visit with us for as long as possible, and fly them back (in August). Try to enjoy the visit and not suffer too much financially due to it. Hopefully we will not have to drain our limited savings to accomplish this.

*As part of the above goal my husband will work with a travel agent.

*Call the state of California and get on a payment plan for tax debt.

*Continue tracking spending daily.

*Continue being conscious of spending on food.

*Sneak at least $5 into savings. A small amount, but better than nothing.

*Search the apartment and find something to sell to make extra money.

*Work on a budget to start using in August and beyond.

We will get through these tight financial times. By making good choices and staying positive we will get to a better place!


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