This guest post comes from Jenney Roberts. Jenney is a writer for various finance related communities including Debt Consolidation Care. She is a financial writer by profession and has specialization in dealing with financial problems and its solutions. She is well equipped to write articles on debt consolidation, savings, planning, frugality, debt settlement etc.
It was at the beginning of the year 2007 that my husband decided to take out a loan to start a business. As soon as he set off with his new business, he was met with a serious accident in the middle of that year. His health insurance policy was not competent enough to reimburse the cost of such major mishap. Even I didn’t have sufficient funds to bear his medical expenses. Hence, I had to take out another loan. I was confident enough to handle the situation as I was employed in a reputable company with a good pay package. But suddenly, at the onset of 2008, when the recession hit the global market, not only was his business shattered but my company also suffered a huge loss and we had to accept a decrement of 50% of our salary. In the mean time, I found that I’ve swiped both of my credit cards excessively and I’m still left to repay the two big loans. Immediately we checked our savings account and found that we are left with only $20,000. The situation became too tough for me to handle and we had to spend sleepless nights. Suddenly one friend of mine advised me that it is with the help of a balance transfer method we get relief from the stress.
When we approached a financial institution to take out a loan, they at first assessed my financial situation and found that we had taken out:
1. One loan of $30,000 at 15% interest with a minimum of $1500
2. A second loan of $10,000 at 10% interest with a minimum of $400
3. A credit card with an outstanding balance of $14,000 at 8% interest with a minimum of $420
4. Another credit card with an outstanding balance of $16,000 at 8% interest with a minimum of $480
Hence the total minimum monthly payment we had to make against our loans was $2,800.
However, with a credit score of 625, we finally got the approval to take out a credit card of 3% interest rate with an adequate credit limit. We transferred all the obligations into the new credit card. Here, we were required to make $1400 as minimum monthly payment. But we decided to pay more than the minimum to repay our debts soon. Hence, we started leading a frugal lifestyle. We tried to use our hobbies to earn money in the leisure time. My husband started sailing with affiliate marketing whereas I often used to write content for different websites after my work shift. Hence, we managed to gather sufficient funds to be able to make the monthly repayments of the loans.
For three long years we struggled hard and were finally able to pay off $76,300. Now, we are leading a stress free life. Recently, I got an increment in my salary. This experience has taught me a lot. Now, I frequently use my plastic cards and always repay my bills on time. Both of us try to maintain a budget so that we are able to save a ransom amount to combat any type of emergency situations.
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