A couple requested help and guidance after finding themselves in a bind over the last few years due to the economy. Once I sat down with them, I realized they hadn’t really overextended themselves per se; they had simply ended up with several small loans carrying extremely high interest rates. As a result, their payments were very high for relatively low dollar amounts.
Once we began compiling their budget and financial information, I realized they had only $8,000 in personal loans spread across about seven different financial institutions. Because of the high interest rates, they were paying $2,300 per month on these loans alone, on top of rent, two car payments, and living expenses. They had no credit cards, which likely explains why the personal loans accumulated over the last few years.
I determined I could consolidate the $8,000 into a four-year signature loan with a payment of $319.17 per month, saving them over $1,900 monthly. This was essential for them. In the same meeting, we reviewed a vehicle loan with a 25.99% interest rate. After more than three years, they had paid over $21,000 into the loan and still owed $14,600 due to interest. I was able to refinance the vehicle, significantly reducing the interest rate to 8.95% and lowering the payment by an additional $233.82.
Altogether, we moved their budget from a negative balance of $432 per month to a positive $1,700. They came in seeking help, but it was clear they also needed financial coaching. This is where teamwork and financial counseling truly make a difference — providing not just solutions, but understanding and guidance for long-term financial well-being.
