I Traded Out My Car Every Year And Now I Have $42,000 In Car Debt

open phones a triple eight eight two five five two two five you jump in we'll talk about your life and your money J is in Fort Worth Texas hi J how are you I'm doing great how are you better than I deserve what's up yes sir so little background I've started your plan back in March and since then I have a second job so I'm working about 80 hours a week I've paid off just about $35,000 so far this year and now I'm was we went to your smart conference here in Dallas and was reading one of the books last night and decided that it's time to get rid of my car I went to Kelly Blue Book we've got a estimate and I know I'm upside down I'm upside down quite a bit at about $18,000 upside down whoa how in the world so I have had a really bad habit of trading in my car just about every single year I was 18 years old so you've rolled negative equity every time into it yeah so it's not just this car it's all the bad deals up to this point rolled into one absolutely this one was probably the worst they told me that my body style had gone out today and if I didn't trade it in I would be losing money every day on the car and so make one final mistake in this one but I've decided to turn this around I went to a local credit union today and they actually told me my best option would be a home equity loan because getting 18,000 on just a personal loan the interest rate would be really high and it's unsecured so they wouldn't they didn't like that deal I showed them my debt snowball and what I've paid off this year and they said that's all really good but with that amount they're looking at some other options and I just wasn't comfortable with putting my home at that point so I know I'm not either you know they're going to give me a good Reyes from your credits clean it's it's getting there for sure it's gone up you know about 50 points since I started this plan just paying everything off okay so it's not talking they're still talking about nine percent they didn't run a credit application but they said that's about where it would be nine percent equity loan or on a personal loan on a personal loan okay now they recommended the home equity yeah and yeah your household income is what with my part-time job I'm making just about a hundred thousand but my part-time job all 2,000 of that's been going to debt every single month and and how much debt do you have total not counting the house total left I have including the car eighty so I've got about thirty-eight left to pay on other stuff so what are you owe in the car forty-two holy okay um let's see here and eighteen of that is the negative equity so if you sold the car and borrowed eighteen thousand dollars to do that what are you driving um a very cheap one thousand dollar car that you have or that you're going to get now I'm just going to use my emergency fund to just buy and then rebuild up next month's income so you might end up borrowing nineteen thousand as what it amounts to which is okay at least that's better than forty two so that cuts your debt uh well it cuts it by twenty five thousand bucks right yeah and my my payoff date is August 2018 that's where I'm at now but I think if I did this I'd be able to do it easily by June of next year yeah I'm doing the personal loan and I'm going to pay the higher interest rate I don't want your home pledged for this mess I'd rather to be unsecured debt and yeah because the interest rates are not going to matter much given how fast you're going to pay it off okay and we're get we're just getting rid of big chunks of debt yeah I'm with you I think that's what you do but I wouldn't I would not do I wouldn't give him the deed to the house I would want to get Moline on the house okay and I don't is your again it's $18,000 you're not going to have the loan out long and so the difference in that you're paying is very very little very little so hey I hope that helps thanks for calling this is the Dave Ramsey show hey guys Rachael Cruz here hope you enjoyed that video from the Dave Ramsey show if you want to watch another great video check out my video three things you should consider renting right over here or click the link in the description below

Channel: The Dave Ramsey Show

Views: 343,843

Rating: 4.8828597 out of 5

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Id: _HR6XlH4WeI

Length: 5min 3sec (303 seconds)

Published: Tue Oct 04 2016