Moving In The Right Direction - Finally!

I alluded to a large change in our debt situation a few months ago and now it has come to fruition. I was freaking out in June because of our rather large consumer debt and how long it was going to pay it back even with an accelerated plan.

I had basically told my family that the hubs and I didn't want gifts for Christmas, birthdays or anniversary's and we could not reciprocate from now until - the end of time.

• My parents offered a low interest loan.
• I did not email my family and share my tale of woe so my parents would loan us money.
• My parents would not have loaned me this large amount if they didn't trust we would pay it back.

We got the check yesterday and deposited it. Right away our personal loan at our bank was paid. Then I went home and paid off all but two store credit cards. I have returns to make so want to pay the balance off after those have cleared.

Even though we still owe the large amount, we no longer have to make seven payments a month to cover them. The interest rate is 4% and we have a monthly repayment plan with my parents over the next five years. Our plan is to pay it back in three.

We are saving $186 in minimum payments and TONS in interest. Our debt to income ratio will go down and our credit rating will go up.

Next step is to refinance our condo to get out from under the interest only loan we have, get a better interest rate and possibly stop paying PMI (private mortgage insurance). We may take a little equity to upgrade our kitchen and bathroom but that we will get back in the form of a better resale value. Our plan is to sell in five years.