The Good, The Bad and the Ugly: My Loan Experiences

I’ve had a lot of experience with loans. A lot. And I’ve had just about every type of loan you can think of. Which is why I have a deeply personal and abiding dislike of debt, despite the fact that the social stigma associated with debt has largely disappeared.

So, with inspiration from Ginger at Girls Just Wanna Have Funds, I am sharing my  loan experiences with the world.

I do hope that you’ll join in by leaving a comment, and/or a link to any post you write on the subject.

Payday loan

I think I’ll get the ugly out of the way right now. I was young. In college. Poor. Too proud to ask my parents for help. I went to a post-dated check place, with proof of my summer job as a waitress (my position in the school’s cafeteria was suspended until fall semester), and got enough to pay a month’s rent and any other expenses that came up before the tip money accumulated enough for me to start living on.

A payday loan is about the worst loan you can have. Ever. It’s right there with car title loan. The interest rate is abominable, and it is very easy to renew. It is very easy to slip into a habit of constantly renewing and watching the fees stack up. In fact, the “nice” man at the payday loan place invited me back in a couple more weeks for an extension of the loan. It would be no trouble at all. I never went back.

Credit cards

Since I’ve started with the worst (and most embarrassing) loan, might as well move on to the next. Credit cards. A racked up a ton of credit card debt (I *had* to get my payday loan because the single card I had at the time was maxed out at $800 ) while in college. Mostly on road trips and other frivolity. By the time I graduated, I had three credit cards — all of them nearly maxed out.

Now, though, my husband and I try to be very careful. We have specific uses for our credit cards, according to the rewards they offer, and we pay the balances off each month. It was so hard to dig out of that high interest credit card debt that I do not want to try it again.

Car loan

I got my first car loan at age 18. My parents co-signed. The next car loan I got (after I had paid off the first loan and later totaled my precious car), was one that my husband and I bought together after we married. It’s been paid off for just over a year, and we are hoping to save up for the next car so that we can buy it outright. This is done by continuing to make the “car payment” to a high yield savings account. And made possible by the fact that we refuse to buy new.

Mortgage

We bought our first house last year. Very exciting. Next time, though, I’ve told my husband that he has to give better warning. We only put down a 3% down payment (it’s an FHA loan) because my husbad announced his intention to buy suddenly, just two weeks after insisting that we wouldn’t buy while he was at school. But it is a 30-year-fixed with a decent interest rate.

Student loans

We’ll be paying these off for-e-ver. Even though I had a scholarship and a part-time job, I still took out some loans. And then there was grad school. At Syracuse University. One year there cost more than four years at my undergraduate state school in Utah. Not only did we take out federal loans for my grad school, but I also took out private loans. And now my husband is in school.

We’ve started paying off my student loans, and as soon as Josh is done and gets a job, everything he makes will go to the student loans (we live mainly on what I make). So we should be able to pay off the student loans in 3-5 years after he finishes.

What about you? What are your loan experiences?

image credit: sxc.hu