Question by BubbysMummy02: What could possibly happen if I stop paying my capital one unsecured loan?
I got an unsecured loan with capital one last year to consolidate debts.Loan amount for 17500 now.Even getting by is getting harder,what can i do? Can i refinance and get the payment lowered or risk ruining my credit.
what about consumer credit counseling?can they help, i am getting divorced so i had to get the loan
Best answer:
Answer by Jeanne R
If you stop paying you will:
1. be sued and lose
2. have to pay the attorney’s fees for both sides
3. have late fees and penalties added to your debt of $ 17,500
4. hurt your credit
You should get a temporary part time job and use all of that money to pay off your debt as fast as possible and give yourself some breathing room. Here is a plan that will allow you to get out from under and not have anymore money problems.
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an “emergency fund” category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.
2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.
3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:
To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment
Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment
Debt #1: paid off
Debt #2: paid off
Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.
That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.
4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.
5a. When you have your emergency fund in place, add a category for “fun” to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.
5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money. Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.
Give your answer to this question below!
Getting by is harder? Unsecured loan, consolidation, (possible) bad credit… I’d suggest you take a breather here and take a close look at your finances. It’s time to see where you can cut. What are the basic needs and what is extravagance Not to preach, but spending is easy. Go back to the basics, make a budget and go according to your revenues
See Jeanne’s answer. Don’t default on this loan. Do what you can to pay it.
This will depend on what you can afford.Refinacing in most cases will be more interest than the original but if you are willing to pay more in the long run,it might be to your advantage.They can sue and get judgement against you if you do nothing right now so you risk more than your credit,because if they get judgement against you,they can legally have it taken out of your wages if you don’t pay
Call them and try to work with for a newer, and lower payments.
Explain your situation ,and be clear, and honest with them,and ask them to reduce or freeze your interests payment, be firm about this.
try to reach a deal you are comfortable with it.
these days banks are more eager to work with their customers.
Let me understand this. You ran up too much debt on your various credit cards. You then got a consolidation loan to pay off those debts. And then you forgot everything you did to get yourself into that mess and continued your debt build up. And now you want to refinance again? Listen clearly to me. You are living beyond your means. You need to cut up your credit cards and reduce your spending. As far as what will happen to you if you stop paying off your debt, a previous poster said it all. You will be sued, you will lose, your credit will be screwed for years and the ordeal will cost you plenty. You need to clean up your act.