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Do I Have a Debt Problem?


Most of us must borrow money to buy a home, go to school, or purchase a reliable car to take us safely to and from work. And when used responsibly, credit cards can support our financial lives when the unexpected happens (such as the occasional bill from the vet or the plumber). So, while having debt is often a part of life—having debt problems doesn’t need to be.

And it's not always about how much you owe that defines whether or not you have a problem. A better indicator might be how your debt makes you feel. If your debt negatively impacts your overall financial picture, or keeps you up tossing and turning at night, it's a good indicator you could be having some trouble. Here are seven ways to tell if you have a problem with debt, and what you can do about it.

7 Signs You Have a Debt Problem

1. You’re juggling bills.

If you find yourself prioritizing which bills will be paid this month and which ones won’t, this means you’re missing payments. Not only can this hurt your credit score, it’s a warning sign that your money life isn’t lining up quite right. If you’re living paycheck to paycheck, or if just thinking about paying bills makes you feel anxious or scared, you could have a debt problem, a budgeting problem, an income problem, or a combination of all three.

2. You’re spending more than you make.

If you aren’t sticking to a budget or don’t have one, it’s easy to start living beyond your means. Debt accumulation due to medical costs is one thing. But for many, compulsive online shopping is not just an obsession, but a serious addiction.

3. You’re unable to save.

High debt payments mean you’re not able to contribute to your emergency savings, put money aside for retirement, or save for long-term goals.

4. You’re unable to borrow.

If your existing debt impacts your credit score, it can mean you’re unable to borrow the money you need. For example, maybe you keep getting turned down for a new auto loan, or lenders are only offering you very high interest rates.

5. You’re only making the minimum payment.

If you’re paying only the minimum on your balances, you’re paying mostly interest. You may be making payments, but your statement balances (and principal amount owed) aren’t moving any lower.

6. You're feeling embarrassed and defeated.

You have feelings of hopelessness or shame about your money situation. Maybe you’re hiding debt from your family, or you’re feeling bad about using credit to pay your household bills.

7. You’re arguing about money.

Money problems can quickly begin affecting your health, relationships, and quality of life. If you’re losing weight, losing sleep, or fighting with your partner about money and debt, it’s time to take action.

How to Tackle Your Debt Problem

While even just one of the seven signs above could signal a debt problem, it doesn’t mean your situation is unsolvable. Simply accepting that you’re having difficulty is the first step to finding a solution. Here's how to tackle it:

1. Face the facts.

Write down how much you owe, your interest rates, and the minimum payments. Calculate how long it will take to pay off each debt if you keep making only the minimum payments.

2. Find some quick wins.

Look for small balances you can pay off right away. Use micro-actions to help you stick to a budget. Or maybe it’s time to grab a part-time job or side hustle. Doing something that makes you feel like you’re making progress on your debt problem can boost your self-confidence and improve your mood.

3. Fix your financial infrastructure.

If you don’t have one, now is a good time to create a budget. Drill down on your income and expenses, but also plan for an emergency and/or strive for retirement. Creating a solid financial foundation takes time. So set achievable goals and be patient with yourself.

4. Forgive yourself.

Whether the debt you accumulated came about due to factors beyond your control, or from poor spending habits you’re working to improve, self-compassion is crucial. Feeling guilty only makes it hard to stay motivated while you trying to make things better.

Consolidate Debt at a Lower Rate and Save

If you think you might have a debt problem, it’s not the end of the world, and you’re not alone. In fact, many of our customers have used a personal loan to gain control over, and eventually overcome, their problems with debt. By consolidating high-interest debt, not only can you lower your rate, you can improve your monthly cash flow and pay down balances faster.

“I was drowning in debt with high interest personal loans and credit card debt totaling $1,100.00 a month which caused me to start falling behind on my mortgage payments. I knew the only way I could get out of this hole was to get a loan to pay off the high interest debt and credit cards to secure a lower payment and regain control of my life. But I was being turned down by lender after lender because of late payments. However, [through LendingClub] I was approved for a loan large enough for me to close out all my debt—saving me $640.00 a month—and also saving my home.” John, a member from California*

*Individual results may vary.

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