3 people who used a personal loan to consolidate credit card debt

3 People From Different Backgrounds Who Took Control Of a Combined $120K in Credit Card Debt With Personal Loans

In the latest of our 3 People series, we meet three women from diverse backgrounds, cities and careers, who open up about overcoming financial adversity caused by credit cards. Each person’s credit card debt was caused by a different reason, yet each used a SoFi personal loan to take control of their debt and get their finances back on track.

American consumers have long enjoyed the freedom and flexibility that credit provides. The Federal Reserve puts the total amount of revolving credit, such as that carried on credit cards and in personal loans, at $979 billion as of September 2016. And our appetite for credit is growing: In the year between October 1, 2015 and September 30, 2016, the amount of revolving credit outstanding increased 5.8%.

Anyone carrying debt knows that the number that really matters is the interest rate. As of August 2016, the average consumer who pays interest on his or her credit card pays it at 13.76%. For many, rates on credit cards and personal loans from traditional banks can be double that, or even higher, making payments difficult to manage.

Debt consolidation personal loans can offer a lower-interest solution that reduces monthly payments and interest rates, while making it easier to get on the path to a debt-free future. Meet three SoFi members who used a personal loan to change financial course and help their families through times of challenge and transition. Kelly Pitre, Debbie Toney, and Courtney Johnson took charge of their financial situations, put their good credit to good use, and reduced their monthly payments after choosing personal loans from SoFi.

Kelly Pitre using a personal loan after a home renovation

Home Improvement and Renovation debt consolidation

Age: 47

Hometown: Rural Louisiana, between Baton Rouge and New Orleans

Location: Baton Rouge, LA

Relationship status: Married

Rent or own: Own

Number of kids: 5

Alma Maters and Degrees: Portland State University, Psychology; LSU, Masters in Public Administration

Career: Grants and contracts administrator for a biomedical research firm

Total Personal Debt: $45,000

SoFi savings: $750/month

SoFi: Your personal loan story starts with a new home and a lot of home improvement. Tell us about the house.

KP: Before we got married, my husband bought the worst house in Magnolia Woods, which is actually a great Baton Rouge neighborhood. Anybody who saw the pitiful state of my kitchen understands what I mean. It had two ovens and only one of them worked. The bottom oven was so small a loaf of garlic bread didn’t fit in it right.

We have four boys and one girl between us. I sold my house in 2013 and moved in with my husband the day my daughter graduated from high school. When she went to college that autumn, it was six of us in a three-bedroom, two-bathroom house. We lived like that for a while, trying to decide whether we should sell the house or renovate. We decided on a whole-home renovation in October 2014, adding a new master bedroom and master bath, and every mother’s dream—a laundry room! We took a modest house and made it our dream home, and I’m really proud of that.

SoFi: How did the home renovation lead to unexpected debt?

KP: There were surprises—unexpected projects we didn’t count on when we started. Additionally, my daughter moved back to attend LSU locally; we hadn’t planned for that. So we built a new garage and put an apartment above it for her. We did as much of the work as we could to save money. But we still maxed out every credit card we had. Almost nobody will lend you money specifically for a renovation.

SoFi: In what ways did personal debt impact your life?

KP: It’s not a good feeling when you don’t have access to credit because your limits have been met. I couldn’t make purchases online or give my daughter my card to get her hair styled for a semi-formal dance. We were one car breakdown away from being unable to pay bills, and I was worried.

SoFi: So your debt kept you from doing the things you wanted to do?

KP: Yes. We normally travel twice per year—once with the kids, and once without. We had to forego all vacations.

SoFi: What made you decide to pursue a personal loan, as opposed to another credit card line or other financing source?

KP: A home equity loan or line of credit wasn’t an option because my husband had less than 20% equity in the house. He had also just been through a divorce, so his credit situation made it more expensive for him to borrow.

Recommended: Home Improvement Loans – How to Choose a Loan for Home Renovations

SoFi: How did the personal loan from SoFi help realign and elevate your life?

KP: The personal loan was the easiest, cheapest, and quickest way to solve our problems and reduce payments. Working with SoFi was wonderful. It took three days to be approved and maybe two weeks to fund the loan. Paying off the credit cards using the loan actually freed up a lot of money. I’m saving $750 per month, which I can use to further pay down debt or pay for more renovations. And there’s no more stress from having maxed-out credit cards.

SoFi: What do you want your life to look like in five years, and how is your personal loan helping you get there?

KP: The long-term plan is to finish the renovations and landscaping this spring. Then we’ll work with SoFi to refinance the house. It’s going to feel so good to only have a house note to deal with. I’m also ready to save for retirement again, even though I’m not retiring any time soon. I’m young—still playing beach volleyball three times a week!

SoFi: What was your last major purchase?

KP: We’re taking a Disney Cruise out of Galveston, and we’re very excited about that!

SoFi: Are you happy with the renovations?

KP: I love my new kitchen and my commercial, six-burner stove. You can’t make a big pot of gumbo properly on a conventional stove. Before the renovation, my kitchen had only three cabinets that I used to store needs for five kids! And our new hot tub is really helping us forget all our worries from the renovation.

Debbie Toney on using a personal loan after family emergency

Credit card debt consolidation from family medical bills

Age: 60

Hometown: Charleston, WV

Location: Charleston, WV

Relationship status: Married

Rent or own: Own

Number of kids: 2

Alma Mater(s) and Degrees: West Virginia Institute of Technology, nursing

Career: Neuroscience intensive care nurse

Total Personal Debt: $40,000

SoFi savings: $397/month

SoFi: You’re a hard-working nurse trying to help her family. Please tell us about the medical debt you incurred on behalf of your grandson.

KP: My 3-year-old grandson is being evaluated for possible leukemia. My daughter was a stay-at-home mom, and her husband had been laid off from his job as a surveyor for the coal mining industry, so they lost their insurance. In my efforts to help with medical and hospital bills, and essentially pay to keep two households going, I accumulated significant credit card debt, despite working many hours of overtime. Before I knew it I had $40,000 in debt.

SoFi: In what ways did personal debt impact your life?

KP: It’s embarrassing to tell someone you have so much in credit card debt. Every month, I juggled the bills, deciding which to pay first, and how much of the credit card balance I could actually pay. I grew up poor, so I’d always been very careful with money—until this disaster hit. The debt was a constant burden, always in the back of my mind.

SoFi: How did your debt keep you from doing the things you wanted to do?

KP: My husband and I couldn’t take a summer vacation. We cut out all luxuries and extras, and stopped going out to dinner. We were in pretty dire straits for a while.

SoFi: What made you decide to pursue a personal loan, as opposed to another credit card line or other financing source?

KP: It is very humbling to ask for a loan, and my bank was not very receptive. The credit union at my hospital offered interest rates that weren’t very good. So at first I dipped into my retirement accounts, taking $20,000 out of a 401k to help my family. And I kept taking more and more over time, but I still could not keep up with the bills and the payments. It was also emotionally hard, because I was pulled in different directions, torn between working extra shifts at the hospital for more money, and wanting to be with my daughter and grandson.

Related: How This Couple is Climbing Out of $23K in Credit Card Debt and Towards Retirement

SoFi: Why did you conclude that a personal loan was your best option?

KP: I read a magazine article about credit card debt consolidation loans, and SoFi was one of the organizations recommended. I did some research online, and found out how wonderful SoFi really is.

SoFi: How has obtaining a personal loan helped realign and elevate your life, financially and otherwise?

DT: SoFi has an incredible staff; everyone I spoke with could not have been nicer! The loan is helping me focus on my grandson, and not worry about how to pay off high-interest credit cards.

SoFi: Are you looking forward to making any major purchases?

DT: We have an acre and a half of land, and I would love to put a pool in. My grandsons love to swim and they live nearby. I’d love it if they could just come down and jump in the pool.

SoFi: What do you want your life to look like in five years? How is your personal loan helping you get there?

DT: I’ve been fortunate to work at a job I love for over 30 years, and I was happy to help my family. My daughter and son-in-law are now back in the workforce, and we will deal with whatever comes next.

Courtney Johnson on using personal loan after divorce

Credit card debt consolidation from legal fees related to divorce

Age: 32

Hometown: Los Angeles, CA

Location: Los Angeles, CA

Relationship status: Married

Rent or own: Own

Number of kids: 3

Alma Mater(s) and Degrees: University of California, Berkeley, Social Welfare; University of Southern California, Doctor of Medicine and Masters in Social Work

Career: Pediatrician

Total Personal Debt: $35,000

SoFi savings: $400/month

SoFi: Please tell us about your legal debt.

CJ: I had a lot of expenses and legal fees associated with a divorce two years ago. I had graduated from medical school, but at the time I was still in residency. Residency is everything you see on TV, meaning horribly long hours and a really low salary.

SoFi: In what ways did that personal debt impact your life?

CJ: I didn’t allow the divorce or the debt to stop me from finishing my residency. I powered through, and I’m very proud of that. But it was a day-to-day struggle with a small child. I’m fortunate in that my parents also live in Los Angeles. So when I separated from my ex-husband, my son and I moved in with them so that I could keep up with my bills.

SoFi: How did your debt keep you from doing the things you wanted to do?

CJ: My entire residency paycheck went toward my student loans, my legal debt, and daycare for my son. I really didn’t have much left over, so I wasn’t getting anywhere in terms of being able to put money away and plan for the future with my son.

SoFi: What made you decide to pursue a personal loan, as opposed to another credit card line or other financing source?

CJ: I already had a personal loan through my bank, but the interest rate and monthly payments were both really high. I just happened to get an introduction letter from SoFi in the mail. So I went online to see what my payments would be.

Read Next: Personal  Loans – The Key Ingredient to Managing Life’s Ups and Downs Like a Boss

SoFi: So the personal loan from SoFi helped realign and elevate your life?

CJ: Yes. With the interest rate SoFi offered me, my monthly payment is less than half of what it used to be. My credit card had an outrageous interest rate, and now it—and the personal loan I took out from my bank—are paid off. I also appreciated that the loan application process was simple. Being able to go online and upload a pay stub using my phone made it so easy. I didn’t have to jump through hoops or send documentation going back years just to get a loan.

SoFi: What do you want your life to look like in five years, and how is your personal loan helping you get there?

CJ: I was able to save again. Before long, I saved enough for a down payment and bought my first home. I’m very thankful that I was able to do that for my son, and that the savings allows me more opportunities to go out and live with less stress. And it was because of that freedom that I was able to meet someone new.

SoFi: What was your last major purchase?

CJ: I’ve recently remarried here in Malibu, but we’re planning to have a larger, more formal ceremony for our family and friends in Puerto Rico in April. That will be the last big spend for a while.

SoFi: How has SoFi helped you with finances after divorce?

CJ: I’ve been able to get out of the financial hole I was in. My son has a wonderful home with his own room and a yard. And I’m in a healthy, happy relationship. SoFi is helping me with the last piece of the happiness puzzle.

To learn more about how a personal loan can help improve your financial situation, check your own rate for a SoFi Personal Loan.

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6 thoughts on “3 People From Different Backgrounds Who Took Control Of a Combined $120K in Credit Card Debt With Personal Loans

  1. Margaret Durnien says:

    I have applied for personal loans, but even with a decent credit score and report I have been turned down because of debt to income ratio. Which if I am paying the life sucking charge cards off I will be fine. Been through two company’s and now being offered credit modification as only option. We owe about 47,000.00 in cc debt and our income is between 65kand 70k.we have insurance, life, home, car and health. Don’t understand what the point of these offers are if they won’t help people that are in need of them.

  2. Hi Margaret – Thanks for your feedback. Our goal is to help as many people as we can, but we do have specific eligibility requirements in place so that we can ensure our members are able to pay us back: https://www.sofi.com/eligibility-criteria/. If you have any questions about your application or would like to further speak with someone on our customer service team, please give us a call at (855)456-SoFi

  3. Amy Flickinger says:

    We also are in about 40,000 dollars worth of debt. It’s really frustrating when I know I could pay every month on a loan if I didn’t have the debt we do…but I always get told our debt ratio is too high and no one will help us. I feel like I’m drowning.

  4. Dave Ramsey it up!!!

  5. I have approx 40,000 credit card debt
    And have been struggling to pay bills. They all get paid but some late and that has affected credit for both myself and my husband. We bring in around 75,000-80,000 in income but because of credit not being good enough and debt ratio have been turned down for refinancing. Don’t see how this would work.

  6. Hi, I would like to inquire about my wife and I getting a personal loan to consolidate our personal loan and credit card debts.

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