This applicant who lives in Stockton, Ca, wants a personal loan to pay off her gambling debts. She has used up all their family credit, which is their Visa Card ($8000 dollar limit) and their Line Of Credit ($35,000). When you read this plea for a 45-50 thousand dollar loan, it can be heart wrenching to see how badly a gambling addiction can rip a household apart, and rip apart the fabric of a family.

NOTE: The beautiful inset image, which depicts the isolation of  someone suffering from gambling debt, was created by the graphic artist Ananda Spadt – see her blog here.

We have kept our applicant’s name secure to protect her privacy, but we have left the actual City of Stockton. We have also changed the names of her husband, her kids, the genders of the children. Stockton has a population of over 300,000 now, and it’s certainly a City, but at Clf, we don’t take chances with our applicants’ private information.

Just so you know, all of the loan applications we discuss here at California Loan Find are volunteered for the purpose of reviewing our list of Reputable Lenders. It’s a simple trade off. You can read more about that here.

So after reading our applicant’s request for a loan to pay off her gambling debt, which describes very well how bad it can get for the family of an addicted gambler, and for the gambler suffering with their addiction, we will work out her possible loan options. The loss of financial security and the loss of a family’s sense of security is devastating. You can see how desperate this applicant is to get approved by some kind of lender. She wants to make it all better for herself and her family, and she is willing to work off her debt ANY way she can. All of our editors and writers here at Clf wince when we read these kind of requests for a gambling debt loan.

The thing to remember is that this applicant is not alone by any means. There are millions of Americans who have really bad gambling debts who are in just as much personal debt as this woman is – some for much much more. Out of control gambling causes families to lose their homes, their credit rating, their social status, and self respect – which is the single greatest loss you could ever experience. Anyway, enough of the introduction - here is this borrower’s loan application. 

Type of Loan :: Personal Loan To Pay off Gambling Debt

Why do you need a loan? – Explain in detail :: I have got myself into deep debt from an addiction to gambling. I started gambling innocently enough on video poker machines down at our bowling alley. I used to break even many times but in the end I always lost money. One time I won over $3000 dollars on a video jackpot machine in Vegas. We were staying that Venetian Casino right on the strip and I won the three thousand dollar jackpot the first day we were there. That REALLY got me hooked, and then started playing Blackjack, Roulette, Craps, and Texas Holdem tournaments.

I ended up leaving Vegas with over $15,000 dollars in winnings. My husband and I were so excited! We told friends and family about our good luck, and when I got home I started to down to the little local bars that video gambling machines. I not only kept losing, but I was spending allot on the food and drinks in the bar too.

I got way behind in our household bills because of the mounting gambling debts, and realized I was spending too much money in the bars. I decided to do all my gambling online at home. That is when it really got out of hand. When you gamble online, there isn’t anybody to really witness your losses, and you can sort of hide your addiction.

My husband Frank finally noticed when he decided to check our Visa Card statement. He saw in the black and white on the statement that our card was completely MAXED OUT! He was furious! He want and checked out home equity line of credit for $30,000 dollars and found out that I had maxed out to.

We had a huge fight and our marriage almost didn’t survive it. I promised to go to counseling for gambling addiction, and now I go to a special group just for people who have gambling addictions.

The problem is that we are so deeply in debt now. I feel so guilty, depressed, and filled with anxiety. I can tell that my husband has not forgiven me, and might never forgive me for what I have done to our family.

My two daughters and one son (Mary, Maggie, and Kevin) have lost respect for me, and sometimes I feel like ending it all by killing myself. I am now on medication for depression and anxiety and most days I don’t want to even get out of bed. Please, please, please help us!

I fear that everything we know is at risk, and I really need this loan to pay off all our debt. If you could lend us the money then I could pay it back over time, and I promise you that I will never gamble again.

How Much Do You Want To Borrow? :: Between $40K – $50K

Length of Employment :: Over 5 Years

Time at Address :: Over 5 Years

Age :: Over 30

Extra Info Here – anything else that would help us get your loan approved :: My husband Frank has a small business where he sells auto parts, and I am stay home Mom. I have been applying for jobs in our area, and it looks like I might have to settle for a job at Dairy Queen. It’s not glamorous, and does not pay very well, but it would be enough money every month to make a loan payment to you.

My husband’s business makes enough income to cover all of our bills, so ALL of my paycheck from the Dairy Queen could be handed over to you to pay off the loan as quickly as possible.

Sex :: Female

Marital Status :: Married

Ever Claimed Bankrupcty? :: No – never

What City/Town and State is your primary address in? :: Stockton, California

Have you checked your credit report in the last year? :: No

Would you consider your credit rating to be? :: Poor

Collateral? :: No

Down Payment? :: No

Do you a have co-signer or co-borrower? :: No

Employment Industry, Title, Experience, Background :: None. I’m a home-maker and the only experience I have in the work force is from when I was a teenager. I worked at IN-N-OUT burger from when I was 16 years old to 18 years old. I am employable though, and I am going to take the job at the Dairy Queen down the road – it’s walking distance.

One more thing before we consider this applicant’s request for a loan. Pay special attention to the fact that she has never had employment outside of her fast food job when she was a kid. This lack of experience in the work force makes lenders very leary because there is no real credit history for them to use when reviewing your credit report (or lack there of). This lack of a consumer credit history can send desperate borrowers, like the woman appling here, in to the arms of predatory lenders or “legal loan sharks”. (don’t get me started on the subject of loan sharks because this piece could get very long in a hurry). Needless to say, that she may end up paying exorbanant interest rates to pay off all her family credit cards and line of credit.

So for these lending agreements we are going to assume that our borrower is using a high interest, short-term lender, that is charging an extremely high APR (annual percentage rate). These are not Payday Lenders (of course) because the principal of the loan is $50,000 dollars. Could you imagine how much interest that would cost? Don’t get me started on that subject either!

This applicant resides in California so a conventional lender can only lend money at the highest legal “usury limit” allowed by current law. I italized current law because there is always new legislation coming down the bar from the Federal Government and the local State Government(s). That said, there are unconventional lenders such as pawnbrokers and “legal loan sharks” that are licensed to ignore State Laws considering usury limits. Our debtor’s interest rates could sky rocket, so our first job at Clf is to make sure doesn’t enter into a loan agreement with one these predatory lenders. To show her (and you) why you need to avoid legal loan sharks who ignore usury limits, we will show a loan payment schedule from a loan agreement with a conventional National Bank, and then another loan agreement with a high-risk, private lender who charges and extreme amount of interest.

$50,000 Loan to Pay Off Gambling Debt - 10% APR Conventional Lender

Principal Loan = $50,000
Interest Rate = 10%
Length of Term = 5 years
Payment sched. = monthly

Gambling Debt Loan at 10% Interest – Fixed Rate

Total amount to be paid back = $62,705.95
Total amount of interest = $12,705.95
Payments = $1,030.78

This is the best that our applicant could hope for in the way of a fixed rate loan at ten percent interest. This is the kind of loan we hope she could get, but odds are she won’t be approved for financing with a conventional bank. Now we will look the higher interest option with an “unconventional lender”.

$50,000 Fixed Rate Loan to Pay Off Gambling Debt - 25% APR - Loan Shark

Principal Loan = $50,000
Interest Rate = 25%
Length of Term = 5 years
Payment sched. = weekly (lender will likely NOT approve any other kind of payment schedule)

Gambling Debt Loan at 25% Interest – Fixed Rate

Total to be paid back = $81,369.96
Total interest = $31,369.96
Payments = $312.10

Notice how the loan shark is charging over $30,000 dollars in interest over a 5 year term. Criminal you would think – think again. The debtor’s payments every month total over $1200 dollars. In 5 years all of her gambling debts would be paid off and she may have regained the trust of her husband and children again – we can only hope, assuming she never starts gambling again.

See how the second loan option is costing her almost $20,000 dollars more in interest! This is the price we can pay as borrowers when we have no credit at all to speak of – no credit history, and no employment history – not to mention if the lender knows that it was a gambling addiction that brought the applicant to their knees – financially.

With full time job at Dairy Queen, for a starting wage, is close to $8.50 as a national average. So her total income from her job at 40 hours a week is $350 dollars, and after paycheck deductions (taxes, etc.) she gets a little over $260 dollars. Multiple that by 4 and we get $1040 a month income. She would not be able to make the payments demanded by the loan shark crook, so she would have to find a private lender whose interest rate would fall somewhere in between our two lenders displayed here today.

Conclusion

Luckily our applicant did find a private lender near Stockton (in Sacramento which is directly North of Stockton, up the I5). She was completely honest with the private loan company and told them why she needed the money, and was truthful about all areas of her financial and personal life.

She was granted the loan for $50,000 at a fixed interest rate of 17%. This is still a very steep APR and certainly predatory, but it’s a fixed rate, and the loan agreement had NO provisions or clauses that would balloon her payments crank up fees on her. So would you like to see how her final loan approval was laid out? – Sure you do. Like this.

Final Loan Approval to Pay off Gambling Debts (Credit Cards and Line of Credit Debt)

Principal Loan = $50,000
Interest Rate = 17%
Length of Term = 5 years
Payment sched. = biweekly (this lender was OK payments every two weeks)

Last Chance Gambling Debt Loan at 17% Interest – Fixed Rate

Total to be paid: $71,413.30
Total interest $21,413.30
Payments: $547.83

You can see that the debtor is still paying more per month on the loan than what her starting wage is at the fast food restaurant (Dairy Queen). It turned out that her manager hired her as an adult employee and gave her wage of $10.75 per hour. That makes her total income from the job is $1290 after taxes and paystub deductions.

Her monthly payments to the lender total $1,095.66 per month, and her total income is $1,290, so she has almost $200 dollars to pay for other expenses she would have because of her work. Sounds like a drag, but considering she is basically “doing time” for her insane addiction to gambling, it’s not a bad trade.