What One Man Learned
From Consolidating His Debt
Finding ways to address personal debt can be a challenge. But the payoff—a potentially brighter future—could be well worth the effort. Read how one San Diego resident successfully managed his debt with the help of a personal loan.
Hassan Omar, a hard-working medical technician based in San Diego, was out of work for longer than expected a few years ago. Eventually, he found himself short on the funds he needed to cover monthly expenses and take care of his children. “I was running out of money,” he recalls.
Omar started relying on credit cards to get by. He kept getting new cards (at one point he had 10), all of which had high interest rates. He paid the minimum balance every month, but, before long, Omar had accrued more than $30,000 in credit card debt.
Then, a friend suggested that he consolidate his debt with a personal loan. After doing some research, Omar discovered personal loans were a tool that could help him get back on track financially.
Omar was approved for a $20,000 personal loan, which allowed him to consolidate his debt into a single payment per month with a lower interest rate than his credit cards. “The interest rate was fixed, while with credit cards, it’s variable,” he says. Omar knew exactly how much he owed per month and had a clear plan for how to pay it off. This helped him feel like he was back in control of his financial situation.
“I was able to see a light at the end of the tunnel,” Omar says.
As Omar learned, managing your debt is a key step to getting on a solid financial path. With a Discover® personal loan, you could get back to enjoying life and looking forward to a brighter future. Most people get a decision the same day. Plus, with Discover, up to $40,000 can be sent as soon as the next business day after your acceptance.*
Here are some steps you can take to manage your debt and set yourself up for financial success.
1. Assess your financial situation.
Calculate how much debt you have. Make note of the balance, minimum monthly payment, and interest rate on each of your credit cards. Then, see how much money you have in savings and what your monthly expenses are.
If multiple monthly credit card payments feel out of reach, a personal loan is a strong option. You could consolidate your debt into one monthly payment that you can budget for. This can help you feel more confident in regaining control of your finances.
2. Understand the terms of your loan.
When taking out a personal loan, you should know how much money you need, what rate you’re getting, how many months it will take to pay off, and what your monthly payment will be. It’s essential to know you can afford it before you sign on the dotted line.
For Omar, having one payment and an end date in sight gave him peace of mind. Rather than watching his debt increase every month, he watched the balance steadily go down to zero. “By using a personal loan to consolidate my debt, I felt like I could see a way forward,” says Omar, who formerly served in the U.S. Army. “I could set a goal and achieve it.”
My Top 3 Takeaways
Omar shares what worked for him when weathering a
financial rough patch.
REASON 1: Don’t be afraid to
ask for help.
If, like Omar, you want to take control of your financial situation, don’t shy away from speaking to others—they could provide advice that jump-starts your journey towards a brighter financial future.
XREASON 2: Understand what
options are available.
As Omar learned firsthand, a personal loan may be a smart way to consolidate debt as long as you are able to meet the monthly payment.
XREASON 3: Modify your
spending habits.
For Omar, reeling in spending was an integral part of his debt-reduction journey. Refraining from making major purchases on his credit card also helped.
X3. Make a plan to pay off your debt.
Once your loan is secured, the next step is to pay it back on time. Payments can be automatically deducted from your checking account, or you can set a calendar reminder to send it before the due date.
Also, your personal loan was meant to get you out of debt, not free you up to spend even more on your credit cards. Track your spending habits with a budgeting app, a computer spreadsheet, or a pen and paper. Keep tabs on how much money you have coming in, what you’re spending, and how to keep those two things in balance.
In Omar’s case, keeping his spending behaviors in check required discipline. “I quit using my credit card every five minutes for something silly,” he remembers. “And if I charged something, I paid it off within 30 days.”
Once Omar had a plan for paying down his debt and found a new job, he felt comfortable re-building his emergency fund. “I set aside money toward my savings and investments,” Omar said. That made him feel less anxious, and it improved his overall financial picture.
4. Get back to a life you love.
Now, Omar’s financial situation is far less stressful. “It feels great to have money available for me and my wife to do the things we want in life,” he says. “We like to go out to dinner, go dancing, buy clothes. Before, I would think about: What’s this going to cost me? Now that I have money saved and more coming in, it gives me more financial freedom.”
A Discover® personal loan could give you that feeling of freedom, too. “When I can control my debt, I feel more in control of my destiny,” Omar says. “I have options for the future. Good things can happen.”
*If your application is approved, we will send funds after you accept the loan. Your bank or creditor may take more days to process the funds.
For debt consolidation, even with a lower interest rate or lower monthly payment, paying debt over a longer period of time may result in the payment of more in interest. A Discover personal loan is intended for personal use and cannot be used to pay for post-secondary education, to pay off a secured loan, or to directly pay off a Discover credit card.