Debt management?

[TeeJayHoward]

While I'm not technically a poolee, I cannot find another forum to post this in. Hopefully, it's the correct area.

I'm 24, and interested in joining the Marine Corps. I spoke with a recruiter and took a practice exam (90%). I've got an associates degree in Computer Networking and a GED. I'd like to be an 0651, but before I can sign on the dotted line, I've got to figure out my finances.

Right now, I've got a decent job. I make a little over 40K a year, and planned out my finances... Well, rather poorly. I can afford my current lifestyle on my current salary, but not on an E-2's salary. I've got two car payments ($600 and $200), which I'm upside down on. I've also got about $350/month in student loans. Between that and insurance on the two vehicles, ($250/month), I'm looking at $1400/month in debt, plus living expenses. An E-2 only makes a little over $1000/month, right?

I don't want to ruin my credit score by letting the vehicles be repo'd, but at the same time, I can't find a way to join up without harming my credit. Time is running out for me to enlist - I understand that anyone beyond 27 isn't considered for a lot of things. Google claims the Marines offer signing bonuses of up to $30,000, but my recruiter wasn't so confident that I could get anything.

Do the Marines offer any sort of debt consolidation plan? Is it possible for me to follow my dream of becoming a Marine without royally screwing myself financially?

[boblasek]

The only thing I was told is that your credit card interest rates can be lowered to 6% and be suspended until you get out of boot camp. I am in a somewhat similar position as you but not to the same extent. Hope someone can answer this for the both of us.

[Capital M]

You could try selling your car before boot.

[lthunder]

Sort that out before you join. Balance your checkbooks and ask questions, lots.

[WAGGZ]

I don't see anything about wife and kids so I'm going to answer as if you don't have either. Sell the $600 car that means you can put $800 a month on the $200 car, and very soon have no car payment. I "think" you can defer your student loans while in boot camp. Go buy the book, TOTAL MONEY MAKEOVER by Dave Ramsey. It'll answer all your questions about getting out of debt.

[hempstead56]

How about going the reserve route? You still get to be a Marine and you can live your lifestyle you want.

[TeeJayHoward]

Sell the $600 car that means you can put $800 a month on the $200 car, and very soon have no car payment.

I would do this in a heartbeat if it weren't for the fact that I'm upside down on the loan. I owe $26K on the car, and it's currently valued at $16K. It's a shame I've got that damned car, too. Without it, my insurance would only be $100/month or so, resulting in a monthly savings of $750 - Enough to let me become a Marine.

I don't have any kids (that I know of!) or a wife.

Student loan deferment may be great during boot camp, but what about when I get out? The $350/month payment starts up again, and I'll not have the income to cover it.

[SlingerDun]

That car is not going to appreciate is it? I've never owned one that after driving it around a couple years exceeded the MSRP. Sell it before it's only worth 15k,14k etc...good time for a trade in on a cheaper or perhaps even used vehicle and unload the second vehicle (if thats what you mean by having two car payments) unless you absolutely need it. Also a good time to haggle rates with everything thats not fixed and if so double check it... credit card, insurance etc...if you cut even close to 100 dollars a month besides the smaller vehicle payments, thats a substantial savings for a new Marine

--->Dave

[Artemis]

You can look into trading in both of your current vehicles for a used car. Doing this you will still have some money from the previous loans that you will need to pay off but that will go on the new loan and the end result will be that it is much cheaper (payments and insurance). Just something to think about.

[TeeJayHoward]

Sadly, no, the car is not going to appreciate. And there's no way to sell a car where you owe more on than the value of the vehicle.

You can look into trading in both of your current vehicles for a used car.

I like that idea... I may have to look into it further. 15K upside down on a 5K vehicle would be a $400/month loan instead of $800 combined. Hrm.

I've spent all day looking at this problem, and I think I might have found a solution. I can pay off the truck ($200/month) in 8 months if I pick up a second job, start walking to work (1.5 miles, PT bonus!), cancel my internet, apply my tax return and both "extra" checks, and cut my food intake in half. It'll be a major lifestyle change for me, but it would definitely allow me to prove to myself that I'm serious about the Marines. It'd be a mental bonus while in boot ("I worked my butt off for this. No way am I going to let some DI get under my skin and screw this up!") and also allow me 8 months to memorize the boot camp prep guide and get in shape.

Something I was wondering about while watching a video on youtube today - How much does altitude affect your running ability? If I do a 10 minute mile at 5,000 feet, does that translate to a 9 minute mile at sea level? Or does it affect it at all?

Also, should I start training my internal clock to wake me at 5:30 instead of 7?

[Quinbo]

Take em both down to the local dealership and leave the keys in the ignition and a note on the seat that says "YOU CAN HAVE THEM, I'VE JOINED THE MARINES"

[0231Marine]

Have you thought about taking out a loan to pay the difference of your vehicle loan and pay off some of your debt? That way, you'll get out from under your car and you'll have a monthly payment on your loan that you can afford. You can pay a $10,000 loan for about $300 a month over 5 years.

That's if you qualify of course.

[thewookie]

What are you driving for $600 bucks a month?

Doesn't that seem like a stupid decision now? $600 bucks a month for one auto, without considering insurance, what a waste; that's half of my mortgage payment each month and I live on an acre with a private pond. I laugh at some of these car payments that I hear people talk about: worst money decisions that people make, generally revolve around autos that we spend fractions of our life in.

I'm pretty sure the Marine Corps is gonna pull your credit and make sure you honor your debts, and that you can continue to honor them once you're serving our fine Corps.

So, the idea of turning in the keys or getting repoed the "regular" way doesn't seem to brite to me. Or at least I don't think it will help you, it might shut the door entirely.

Because you're upside down, you can't sell the auto's and get someone to finance the unsecured remaining debt, unless you're willing to pay 10-20% interest rate for that now unsecured debt. And since credit has dried up, I doubt anyone, even at ridiculous interest rates, is going to let some guy without any assets to finance over 10k in unsecured debt.

Sounds like you're screwed to me. Go Army, maybe then you can get some slackers bonus and pay for that debt.

Another reason why I have never, and will never, buy a new auto. Even if you buy them one or two years old you can almost always stay ahead of the rapid depreciation (unless you do something really dumb and stretch the payments out for 6 years)

Live and learn.

[0231Marine]

What are you driving for $600 bucks a month?

Doesn't that seem like a stupid decision now? $600 bucks a month for one auto, without considering insurance, what a waste; that's half of my mortgage payment each month and I live on an acre with a private pond. I laugh at some of these car payments that I hear people talk about: worst money decisions that people make, generally revolve around autos that we spend fractions of our life in.

Try $720...LOL!

[thewookie]

Thanks Marine, so many numbers my math got fuzzy - $720 a month that's even more gross!

Another point, you're realistically not going to be able to sell that car/truck either, or I doubt it - especially the one that you're down 10k. Cause when you sell it the bank is obligated to release the title to the new owner, the auto and the title go together, so, at that point your debt to them is now/ or would be unsecured, and because of that, I highly doubt they'll release the lien on the title - meaning you can't sell either. Maybe they'll work with you on an unsecured loan but it's not likely, my bank would not, for sure. The only way we would release the lien on the title is if you came to the table with 10k or the difference between the selling price and the note balance.

Got a rich uncle?