Anyone know about this? If its a good idea, or if it works or anything?

 

Isn't that where you take out some kind of loan, like a home equity loan, or refi your mortgage and then take the 'extra' amount and then pay off your other debt like credit cards and car loans and such?

If so, make sure you get a fixed interest rate on the consolidation loan and after you pay off your debt, don't rack it back up again!!

Lock away your credit cards, or if you must use them, pay the balance off each month! Do not carry over any balance what so ever! If you pay off the car loan, don't go out and trade it for a new one, taking on another loan!

This is the only way these loans will work for you.. I know, I've done it. I took out a loan about 12 years ago to pay off about $5000 in cc debt. Once I paid off the cc, I put them away for awhile. Or, if I did use it, it was only for what I knew I could pay off the next month. I paid extra on the Consol Loan to pay it off 2 years earlier then it was due! That saved me several hundred dollars in interest.

I use my cc's all the time now... To get the points... I just make damn sure I pay the balance in full each month. I have not had a cc interest payment in over 11 years! I don't even care what my cc interest is, because it never comes into play.

If I want something big and I know I can't pay off the balance the next month, I either wait and save for it, or convince myself I don't really need it....

Once you consolidate, you MUST change your spending and savings habits, or you will just end up back where you started and even more in debt.. It's 99% in your hands if you go that route. The other 1% is making sure the loan you do take is legit too, so make sure you check it out carefully!

Good luck! It's great to be debt free! (I still have a mortgage payment, but that's it!)

Mitch

 

I already have changed my spending habits, and have not touched my credit cards in at least 6 months. I only spend if I absolutely need to and dont spend on junk as much.

From what I have seen some companies advertise they can reduce the amount owed and make the monthly payment one affordable sum. Which is good by me if its possible. I got 3 cc cards I would do it with and leave my truck payment out of it, two payments I can handle, not so much. Thanks for the advice.

 

I haven't used a credit card in about 18 months. AS for debt consols, if you do not change your spending habits, you will not only have a aloan to apy off, but you run up the credit cards again, as well.

TSC

 

you can negotiate with the credit card companys on your own..you dont need those debt consolidation services. if you offer to pay .80 on the dollar for example alot of times they will do deals like that. make sure you get the agreement in writing of course.

 

I took a personal loan to get some cards out of collections. Since then I have paid said loan off and have changed my spending habits. If you do this, do not go through a debt consolidator, that looks really bad on your credit report, get a loan and pay them off, and don't settle, that looks bad on your report as well.

 

Good points on the difference between those debt consolidation deals and just taking out a loan of some sort.. I didn't think that might be what you were talking about on your initial questoin.

The loan I made 12 years ago was a personal loan I made on my own. I paid the cc company off in full, for the amount I owed them and it made my credit report glow after that! It also helped that I had not missed any payments before either, I was just never catching up with the interest on a $5000 balance!!

It was so good in fact, that when I applied for my mortgage loan a year later, they wanted to give me $100,000 more then I knew I would be able to make decent payments on! I was pre approved for a $250,000 home loan!! I knew i didn't want to borrow anymore then $150,00 to buy a house with... That's what I did and 11 years later, I've got the principle down to around $82,000 and it's dropping slowly, but surely! Only 19 more years to go! ha, ha!!

Mitch

 

I did one when i was 20, from the age of 18 to 20 i racked up over 10,000 bucks of debt on over 11 credit cards. Finally got my act together, cut up all my credit cards and got a bill consolidation loan. I got one from my bank.

Basically what I did was make a list of all the companies i owed money to and how much, sent it to the bank. They then cut me a individual check for each company and then i mailed them off. Now, instead of having 11 credit cards with APR's varying from 11-24 percent and trying to make minimum payments on them a month and going nowhere, i then had one low interest rate of 8 percent, and only had to make one payment a month. By them lowering your interest payment, they save you a lot of money. Think about it, if you make minimum payments on a credit card with a high interest rate, a ton of that money is going to the creditor, now multiply that by how many cards you have.

Back then it was a lifesaver. I would still be paying off those credit cards to this day if i hadnt done that (im 26 now).

If you only have one or two credit cards and they arent that high of APRs then i wouldnt get one. If you were like me, then id suggest it.

 

Like Da Moose said, if it lowers your interest rate then it works. Anything you can do to lower your interest rate is a step in the right direction.

 

As stated above, do not use a debt consolidation service. It will stink up your credit rating.

My wife and I rolled all of our credit card debt into a 3.9% loan. Then, we cut up the credit cards and implemented the "Get Out of Debt Now" plan. We had already pulled all of our money out of the markets, so that gave us a jump start in paying off bills. The plan covers 36 months, in which we will pay off 3 vehicles, a ton of credit card debt AND the house

 

Thanks for the replies guys. So I think im gonna go to my bank and talk to them about a loan to get the interest rates down and such. That seems like the concensus of the best idea.

 

i just did it. paid them all off and saving a whole lot of money. went from 7.9%- 12.9% to 4.9% on around $5000-+. i would do it, if you bank gives you a good % rate.

 

No offense, but you must have been a complete imbecile at that age.......