Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have had two debt consolidation loans. Currently still paying back one. First one was through Capital One Bank Personal Loan offer via mail and the second is through Bank of America Line of credit.
IMO- if you use the money EXACTLY what you set out to use it for, credit cards bills, it is great. If you truly can go from example 5 payments to 1. The key is to put those credit cards away so you don't end up with a loan and new credit card debt.
It all depends on your debt and spending habits.
So... pro would be less payments to keep up with and hopefully a saving in interest charges. Con would be just accuring more debt.
Anyone that has used a debt consolidation to solve credit card debt please let me know the pro and con of such a dealing.
Maybe you also want to hear from the folks who don't use these services.
They are there to make a profit. You are better off to deal with the creditors first hand and negotiate your own terms. Put yourself on a budget and start learning how to manage your own money.
Plenty of research material on the web. Best of luck.
I get these consolidation offers all the time from a few companies and the rates are always higher than the rate on one of my cards. I had a few cards (between me and my wife) and I just transfered everything over to the card with the lowest interest rate. Now I just pay down the balance on this card and always pay the full balance on the others when we use them.
I'm not sure why the consolidation programs have higher rates, but at least from when I looked it up they were 2~4% more than what I could get on a low interest card.
I once consolidated my credit cards (20+ %), and 2 car payments (8%) in a home mortgage loan (5.75%). Regardless of the tax benefits, the lower interest saved me a ton of money. I just paid what I had been paying anyway, not the lower amount required, and was finished in less than 1/2 the time. Just make sure to pay off the credit card every month from then on. Don't run it up again or you'll be in serious trouble, as your home is now on the line.
consolidating is a good idea. Take out another loan to reduce the interest rates and pay off the high interest debt with the new loan. Then just throw everything you got at the consolidation loan. The reason you are in debt is because you are spending more than you earn, simple as that. So you also need to cut spending or make more money, preferably both. If you don't do that, you won't be debt-free - ever.
Some people just keep borrowing money until they can't borrow anymore which is the fastest way to get to bankruptcy court.
The biggest problem with people this far in debt is they need to learn how they got their in the first place. The first step to understanding money is to go through old credit card bills and start adding up all the interest you are paying to these big corporations. The next step is to begin tracking every single penny that you spend. And then you start cutting back on everything that you can. No more Netflix. No more new clothes. Sell the car and get a used one or ride your bike. Move in with a friend or get a roommate. Keep squeezing the budget and take every spare penny and throw it at that debt. Do this for as long as it takes to pay off the debt.
Keep squeezing the budget and take every spare penny and throw it at that debt.
I personally don't think this is a good idea. You could spend the next 3 years doing nothing and paying off your debt or you could expend the amount of time you pay off the debt and do some activities etc in the mean time. You never know when you're going to get hit by a bus so I greatly prefer the latter option.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
