I Ended Up $20K in Debt, But Figured Out an Easier Way to Pay it Off
Six-figure annual income. Dozens of high-profile clients. Paid speaking gigs. Trade media attention. When it comes to freelance writing, I’ve been a poster child for success. I often tell people that I’ve never held a real job, and it’s true; I’ve been slinging copy just like this post since the day I graduated college in 1997.
Money has never been a challenge for me. I’m not independently wealthy or anything. I just work my butt off. Generally speaking, I average about 55 articles of 300 words or more each month. Every year I pull in about 30 different 1099s.
Because the majority of my work is travel writing, I incur some pretty significant expenses. Most years, I’m able to manage that debt just fine. The year 2015, however, was a doozy.
The Perfect Storm of Personal Debt Hell
Things started innocently. Toward the end of 2014, I hired some contractors to build me a new home office in the back corner of my garage. The project spiraled over budget by about $7,500.
Then, in early 2015, came the parade of delinquent clients—not one or two, but four who refused to pay on time. Normally I keep enough cash in emergency savings accounts (yes, I have more than one) to weather this kind of “natural disaster.” But on the back of the construction overrun, even my backups weren’t enough to fill the hole in my finances. So, faced with mounting bills and four mouths to feed (my wife and I have three kids), I started adding to credit card balances.
The third and final straw came in early April, when I met with my accountant. I pay estimated taxes and had expected to earn about as much in 2014 as I had in 2013. The good news was that I had exceeded my estimate by quite a bit. The bad news: I had a much larger tax burden than I expected.
I filed for a tax extension, like I always do, so I could save up the money to pay Uncle Sam. In the meantime, my credit card debt continued to grow. By September, it had reached a personal floodmark of $20,000. I was mortified. I was embarrassed. I felt like a failure.
Naturally, I started to panic. I played Lotto for the quick fix (which, not surprisingly, never panned out). I scoured the internet for articles about debt consolidation (like this one and this one). I also sought advice from colleagues who had endured similar situations. Without exception, every one of my buddies suggested looking into a personal loan to consolidate my debt at a lower interest rate. So I did, first with my bank (which took forever to respond), and then from a variety of lenders at large.
One of those lenders was SoFi. I had seen a bunch of people in my town wearing SoFi t-shirts, but had no idea what it was until I researched my options. It turned out the finance company has big office about two miles from my home. That local connection was more than enough for me.
After discussing the situation with my wife, with whom I consult on just about all financial matters, I applied the next day for a loan of about $20,000. I set aside a few hours for tackling the application, fearing it would be as much of a hassle as it had been to refinance the mortgage on our home with another lender. Instead, it took a total of about 15 minutes—due in part to a high credit score and the fact that I had digital copies of back tax returns after the mortgage ordeal.
After answering a few follow-up questions about my employment status, I was approved within days. The money was automatically wired to my bank account shortly after that, and I immediately felt a sense of relief.
Related: How This Couple is Climbing Out of $23K in Credit Card Debt and Towards Retirement
What happens next
While I’m not debt-free, consolidating my debt under one loan at a lower interest rate has enabled me to breathe easier, and has offered me the flexibility to handle the curve balls of life as a full-time freelancer.
The personal loan from SoFi also has helped me start over with my credit card companies, a reality that will only strengthen my credit score down the road.
Another benefit of working with SoFi: The member community itself. On its website I’ve been able to watch video profiles of other members, and read blog posts about everything from good debt vs. bad debt to how to network professionally. SoFi also sponsors member events across the country. I haven’t attended any yet, but I plan to do so later this year.
Looking forward, the loan from SoFi will undoubtedly provide me with the flexibility I need to do my job—travel to report stories, purchase equipment necessary to record video and audio footage of those travels, and market my work once it publishes. I’ve got big plans for 2017, including a month-long stint in Chicago and (hopefully) a research trip to the Azores. It’s safe to say I wouldn’t be able to take those leaps without SoFi.
More than anything, however, my lending experience has taught me that nobody—not even the poster child of freelancing stardom—is immune from the harsh realities of debt, and that options exist to help keep it under control.
To learn more about how a personal loan can help improve your financial situation, check your own rate for a SoFi Personal Loan.