This was a debt consolidation loan using home equity that we are going to use today. This is an actual applicant here from our sister site and is used by permission – this is a typical home equity loan used to clean up some bad debts mostly due to a runaway marriage that hit the rocks and ended up in divorce.  This will enlighten some visitors who have never actually seen how a debt consolidation loan looks like when summed up.

We have the applicant’s data to work with, and then we have to do the worksheet on all his debts, and monthly loan payments as they exist now. Then we will carry out the consolidation calculation and see how much less the debtor will have to pay per month in loan payments to service the new debt.

Type of Loan - Debt Consolidation Loan after Divorce

Why do you need a loan? - I was recently divorced and our finances were way out of control during the last two years of our very bad marriage. I’m free now of the marriage but not free of all the debt. My wife got the house and the kids, and I made the decision to take all the debt with me.

Maybe that was bad decision but one I am glad I did for the sake of my three kids. I am desperate for a loan and need help. I do just over $150,000 dollars in home equity after the divorce, so I will use that for this consolidation loan.

How Much Do You Want To Borrow? - Between $80K – $90K

Length of Employment - Over 5 Years

Time at Address - Between 6 – 12 Months

Age - Over 65 and retired

Anything else that would help us get your loan approved - I have steadly employed for over 20 years with Verizon in Santa Barbra, Ca. I am a customer service manager. There is no chance that I could be laid off, because we have finished all of the layoffs now.

Sex - Male

Marital Status - Divorced

Ever Claimed Bankrupcty? - No – never

What State, County, and City or Town do you live in - CA

Have you checked your credit report lately? - Yes

Would you consider your credit rating to be? - Fair

Collateral? - No

Down Payment? - No

If down payment, how much? - A down payment will not apply because this is a home equity loan from my house.

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

Employment Industry, Title, Experience, Background - Like I said, I have worked in the Telecommunications industry for over 20 years and when Verizon was created I was merged in. I’m a good employee and I always pay back my debts. I have included my list of debts I need consolidated. I hope you can help me – I don’t have a terrible credit rating and I was told by a credit scoring company that my FICO is currently at 710. I have attached a worksheet of all my debts for your consideration. I hope this helps me get approved for the loan.

Applicant Debtor Worksheet for Consolidation Consideration

You can see in our debtor table that the applicant wants to have one payment per month of $1200 dollars, and he is approved for an APR of ten percent. His marginal Tax Rate (how much his total deductions in taxes are which includes Federal and State taxes.

Total Home Equity Debt Consolidation with These Parameters

You can see that all of the debtor’s debt will be cleared off his account ten months earlier than if he didn’t consolidate. The big difference is the size of the monthly payment here. Notice how the interest paid is still close if you consider the length of the term. The real difference is that there is relief for the applicant.

What is yet to be known is if the borrower gets his personal finances under control after this consolidation. I’ve personally been there where I consolidated my debt, and then turned around and started spending too much money. The result was yet another consolidation loan. Eventually personal bankruptcy.

Hope this man is smarter than I was.