Loan with excellent credit

[Rocky2013]

I am looking to obtain an unsecured loan for 6,000 for 18-24 months. I currently have a 793 credit score with 2500 monthly income. My DTI is 39% and I owe around 80k on my home with an equity loan of 9k. I have one credit card payment of 50.00 but there is no current balance. I also own my car outright. I applied for a signature loan at a major bank because a friend referred me and was declined due to my DTI. I have been a credit union member for 40+ years and was considering applying there because of low rates and good standing. Can anyone tell me if this is normal and what I may expect at a credit union?

[disneysteve]

You have a near perfect credit score and no debt except for your home and you can't borrow $6,000? I would definitely go talk to the credit union folks.

What's the purpose of the money you are looking to borrow?

[Rocky2013]

Yes. I asked the loan officer how it was possible I was declined. She stated my DTI was too high but credit score was excellent. I then asked her what options I had to be approved to avoid another hard hit on my report. She stated I would need a co-singer or more income in order to be approved. I am retired and work a small part time job and I'm widowed. My monthly expenses are less than 500 per month. I have never been declined for any loan or refi in my life and made one late mtg payment years ago. She stated the requirements were 35% DTI 720 FICO. So I hung up embarrassed and confused why my income wasn't sufficient. I also have 30,000 in available life insurance but do not want to barrow from it or my savings of 3k. I am looking to put a new sea wall on my property and they do not finance. Thank you for the comfort of knowing I'm not in over my head. I did tell her I would be paying more than my payment also each month. I will consider applying with my credit union but will explain what happened first before another inquiry.

[disneysteve]

I also have 30,000 in available life insurance

Is anyone financially dependent on you? Other than covering funeral expenses, is there any reason that you need life insurance?

Depending on the answers to those questions, I'd probably skip the personal loan and take the 6K from the life insurance.

[Rocky2013]

I have 4 children whom all live on their own. All 4 have decent jobs and income. I've never borrowed from my policy and have a will dividing it in fourths I suppose I can pay it back to myself if I'm going to live another 18-24 months! Which I plan on doing. I'm just a bit scared of touching it even though it's only 6k. I would rather get a loan so incase I can't repay (not likely) then it's not owed to my policy. Hindsight is 20/20 not asking the guidelines before I applied. I didn't know banks (Fifth Third) were so strict with good loans.

[disneysteve]

I have 4 children whom all live on their own. All 4 have decent jobs and income. I've never borrowed from my policy and have a will dividing it in fourths I suppose I can pay it back to myself if I'm going to live another 18-24 months! Which I plan on doing. I'm just a bit scared of touching it even though it's only 6k.

It depends on the policy but with whole life, typically the death benefit is paid to your beneficiary and the cash value is kept by the company (which is one reason why whole life is such a horrible product). If by chance you actually do have 30K that will go to your heirs, the worst that would happen is they would split 24K instead of 30K. Big deal. It sounds like they are all well-established on their own. Does it really matter if they inherit $6,000 instead of $7,500? It doesn't sound that would change their lives one way or the other.

[bjl584]

What do you need the money for? Do you have any investments that you can cash out? would a cash advance at a low interest rate from a credit card make sense in your situation?

[sblatner]

How about Lending Club? I have never applied for a loan from them before but they might be able to help.

[Petunia 100]

How much is available on your equity line? I know you said you want to do unsecured, but frankly, debt is debt and you already owe on your home. If the home had no mortgage whatsoever, that would be different.

A credit card with an introductory 0% period might work too. I can think of a few with 18 months at 0%. If you search, you may find one with 24 months at 0%. Credit card lenders have much more lenient DTI guidelines.

[autoxer]

You may be able to get a secured loan against your car. What is it worth and how old is it?

[Jerry91]

Credit unions can offer you a loan with flexible terms and conditions. So, it will be better for you to get in touch with them to get the loan.

[Chris Leese]

I would look into borrowing from your life insurance (assuming it is whole and that if you borrow from it, it still earns interest off of the pre-borrowed amount - at least that is how mine works) and that you will be working paying down the debt.

[bigdaddybus]

Consider applying for the Chase Simplicity card. 0% for 18 months on new charges and balance transfers (with a minimal transfer fee) with excellent credit. Its what I have as a backup.