TikTok viewers were shocked by a resurrected clip of a man calling in to Dave Ramsey's radio show to ask for help with his car loan, which was eating half of his income.
Feraz, 27 from Los Angeles, said he was using up half his $1,200 monthly income in car payments — $600 per month for his BMW.
Ramsey is an American radio host and evangelical Christian who is best known for his financial advice. He has faced controversy in the past, including accusations in 2021 that his company had a policy of firing employees for having premarital sex.
Some people are also skeptical of his legitimacy as a financial advisor, likening him to more of a preacher than an expert on money. But he continues to be trusted by many, with over a million followers on TikTok, where he posts clips both old and new.
"Are you kidding?" Ramsey said when he heard Feraz's situation.
Feraz explained he was making slightly more when he took out the loan, but Ramsey said it was still irresponsible lending on the store's part.
"We've established that their financial people aren't as smart as the people who build their cars," he said. "It's a fine car, but these people are smoking crack to give you this loan."
Ramsey said Feraz had to solve the problem quick, or he would end up in a dire financial situation.
"I'm scared for you, man," he said.
Although the clip is almost eight years old, Ramsey didn't give any extra information on how Feraz has handled his debt since.
In the clip, Feraz said he was also in $15,000 of debt from his last BMW.
He said he was a full-time student in aircraft mechanics and was graduating in 2017. The average wage he could be getting as an aircraft mechanic was $22 an hour, he said.
Ramsey asked Feraz how he was surviving with this payment. Feraz said he lived at home with his parents so he didn't have to pay rent, but he also had $10,000 of credit card debt.
"I'm only able to barely make the minimum payments," he said.
Ramsey said Feraz's first goal was to "tread water" until he graduated.
"The second goal is do anything you can in the interim to get your income up and still graduate in May," he said, to get "any money to throw at this mess."
Feraz said he could ask his uncles for a loan, but Ramsey said all that would do was "turn that family member into your master."
"If I were your uncle, I would love you enough to not do that for you," he said. "I wouldn't do that for you, I would make you fight through this, because I think there's a high probability you will not pay them, and you will damage that relationship."
He said Feraz had to sell the car as soon as he could, but would struggle to find a lender to help him pay the rest of the debt he'd be stuck with.
He added that the good news was that Feraz was 27 and he had the rest of his life "to never do something this stupid again."
"You'll get out of this and you will never, ever look at a car payment the same way again," he said. "I hope you've learned your lesson."
While the clip was from several years ago, the messages in it are still relevant, perhaps moreso given the significant increase in interest rates that began in 2022.
The number of car loans in the US has risen by 29% over the last 10 years, according to data from Finder, and the number of accounts more than 90 days overdue on payments has steadily risen since 2013. Two out of 13 people are making monthly car payments of $1,000 or more, according to Bloomberg.
Financial YouTuber Caleb Hammer, who interviews several people a week about the debts they have racked up, almost always finds they have a car loan with a massive interest rate, such as a 20-year-old who said he was spending half his income paying off a $64,000 electric Mustang.
People commenting on Ramsey's video couldn't believe Feraz got into the situation he did, and questioned why a car salesperson would agree to lend him so much money.
"If I lived at home at 27 and drove home a BMW my dad would throw me out," one person said.
"That's some irresponsible lending," another said. "Shame on BMW for that."
Other comments said the video helped them come to terms with their own significantly smaller debts.
"These videos make me feel great about myself," said one.2023-06-01T10:28:18Z dg43tfdfdgfd