Answers
I have amassed $16,000 in credit card debt. I am contemplating the best way to tackle this debt as there are other things that I want to do with my recently purchased condo. However, I will not begin to make any improvements or take on further debt until I am totally credit card debt free.
The credit card debt is contain on (2) credit cards that have an interest rate of 9% and 12% respectively. I am considering a debt consolidation loan but preliminary research shows that the interest rates being offered are higher than my credit cards’ interest rate. The fixed payment of a debt consolidation loan is what is most appealing to me. What suggestions do you offer? Is it possible to receive debt consolidation loan at a rate lower than what is being offered? Are there other debt reduction remedies that I should consider? Let me know if you need additional information. Please help. Thank you for your time
This is actually a pretty easy answer. If you can get a consolidation loan at a lower interest rate and can afford the payment, you should do it.
Otherwise, it really is a discipline issue. Any installment loan will have a fixed payment, but the payment would certainly be higher than the combined credit card minimum amounts. Therefore, there is nothing preventing you from paying the same amount (as the would-be installment loan payment) on the credit cards each month. Depending on the balances, most would say pay the higher interest rate first but there are benefits to paying off one completely first as well. The interest rates are close enough that I really don't think it matters where you put the extra money as long as the balances are coming down each month.
The only possible benefit to getting an installment loan at a higher rate than the cards would be to try and quickly improve your credit score. This is not a given depending on your credit file but in theory, reducing your credit card utilization should have a pretty big impact on your score. This is assuming your utilization is over 35% with current balances. Paying these off with an installment loan could improve your score more than the negative impact of opening a new account and taking an inquiry or two to get the installment loan. If you do not need the bump quickly, I would NOT get the installment loan unless the rate is lower. It doesn't make financial sense and there is not a 100% guarantee transferring the debt from cards to an installment loan will improve your score.
I cannot answer your question about whether or not you can get a debt consolidation loan at a lower rate or not. That depends on so many things like credit, income, and assets that you really need to speak to a banker. I would recommend a credit union in most cases.
The only other possible thing you can do is contact the credit card companies and ask for a concession on rates or fees. If you have not been late, this is unlikely but many card issuers are working with the card holder more and more to reduce the payments, fees and interest they pay in an effort to stave off delinquency and chargeoffs. This is less likely in your case because the cards are already at a pretty low rate.
Otherwise, there really is not much more you can do that makes sense. Just apply as much as you can to the card balances each month. Just "pretend" you have an installment loan and pay that much each month - the results are the same.
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Hope that helps, post back if need be- regards
Good luck!
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I have a ton of revolving debt (mostly credit cards) and just bought a house 5 months ago so I don't have much for collateral. I've already been denied by a bank so is there anywhere I can turn to for cosolidation purposes that isn't going to kill my credit? I want to consolidate my high interest credit cards onto a lower interest loan and need suggestions.
The best is to deal with a company you already know (your bank).
Maybe you can refinance your mortgage AND your debts (new mortgage... urgent repairs...) http://index-go.com/bad-credit-finance-m ortgage.asp
Stay strong and keep an eye on your expenses.
Good luck !
My husband and I are trying to straighten out our finances because we have a lot of debt (credit cards mostly) and we want to buy a house. Everyone tells us that getting a a debt consolidation loan will help because we can combine all of our debts into one monthly payment, but we kept getting turned down or offered a low amount because we have too much credit being used. What's the point of a debt consolidation loan if your too much in debt?
Hi friend getting loan is one of the fighting challenge in our life.Go to different banks if you are denied at one bank.Don't ever rely on the online loan providers sometimes they wil surely scam you.Just take a look at this link to get the free quotes from the experts around the globe..
i want to consolidate my credit card debt with the hopes of averaging out a lower apr. negative effects of consolidation loan on credit?
The biggest problem with a debt consolidation loan is that if you don't solve the problem that caused the need for it to begin with you could very well be forestalling bankruptcy. Get rid of the credit cards, budget your expenses, live within your means.
I am looking to take out a loan to pay off about $4000.00 in credit card debt. Unfortunately, my credit score is pretty low. How do I find a reliable place to borrow money from? I understand that my interest rate will be higher. I'm just not sure where to begin looking or where to start for that matter. thanks.
Your not.
Get a second job and pile cash on the debt til its payed off.
Cancel the cards and never get another one.
Credit cards companies (banks) make all the rules and can change the rules in the middle of the game.
Dont obsess with your credit ( I Love Debt ) score. Banks spend millions brainwashing people into thinking they need credit cards and a high I Love Debt score to make it in todays world. That's a load of crap! Pay as you go and you will win with money.
debt Free is definitely the way to be.
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...News
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