baznholli asked:
I hear a lot of advertisements about debt or credit card consilidation on the radio or tv but does do this hurt you credit? I guess i want to know is if using this type of service shows up on your credit in a negative way like bankrupcy would? I dont have a lot of debt but the interest rate is keeping me from paying anything off and i want to squash it while i can.
I hear a lot of advertisements about debt or credit card consilidation on the radio or tv but does do this hurt you credit? I guess i want to know is if using this type of service shows up on your credit in a negative way like bankrupcy would? I dont have a lot of debt but the interest rate is keeping me from paying anything off and i want to squash it while i can.
I have also considered getting a loan from my bank in the amount of debt so its on one low payment with low interest. . . is this a good idea?
Please help!
No it doesnt hurt your credit, at least not in Australia. The purpose of debt consolidaiton loans is to make it easier for you to manage, put all your debts (credit card, personal loans etc) into one big loan. The main thing to watch out for is incredibly high interest rates… some placed target people with already bad credit, and these generally have high interest rates (20-22%pa usually). Your best best is to take out a regular personal loan with a financial institution and use this to pay off your debts.
If you go for a debt consolidation with a smaller interest rate, it will take you longer to pay off, but the repayments will probably be more manageable.
The main trap people fall in to, is they pay off their credit card debt for, say, $2000 and their personal loan for $5000 with a $7000 loan. Now this is fine, except alot of people keep their credit card ‘for emergencies’. And then they use it. So they have a $7000 debt consolidation loan, and then before they know it, they have a $2000 credit card debt again. You have to make sure you close your credit cards completley, if these loans will work. Otherwise, you’ll be in even more debt!
Practically any type of loan can be wrapped into the debt consolidation process. Common types include finance charges, late fees and overdraft charges, credit cards, personal loans, utility bills, medical bills, car loans, store cards, gas cards and back taxes.
Unlike bankruptcy, in which debts are cancelled and your credit rating collapses completely, debt consolidation loans are essentially a type of refinancing, where several old loans are replaced with a new one that has more favorable terms.
no. To get a debt consolidation loan you need own property and the property need to have equity to serve as collateral for the loan. You also need to have good credit, not just a good credit score. But most people in debt have negative debt-to-credit ratios and credit-wise that warns potential lenders not to loan you money because you show that you owe more than you can reasonably afford to pay. Plus if you get the loan, you’re gonna pay back a lot of money and you can lose your home if you miss a loan payment! The good thing is that I can get you out of debt in about half the time and cost of a debt consolidation loan and without causing you to risk losing your home.
here is the company i used. they lower your monthly payments and cut your debt in half, this is also the least hurtful on your score.