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I'm getting calls about a debt consolidation loan (5% interest rate) from a legitimate, credible bank I belong to.
I'm wondering if anyone here has done one and if it helped them out. I would like to pay off my cc debt and then have a lower monthly payment. Does this sound like something I should consider? Currently, I am only able to make my minimum (plus a little extra) payment each month.
Unless you can't handle the debt you have now the way it's structured I'd give these "offers" a wide berth. The second you consolidate the terms of your debt will change.......in the banks favor.
I'm getting calls about a debt consolidation loan (5% interest rate) from a legitimate, credible bank I belong to.
I'm wondering if anyone here has done one and if it helped them out. I would like to pay off my cc debt and then have a lower monthly payment. Does this sound like something I should consider? Currently, I am only able to make my minimum (plus a little extra) payment each month.
Any insight would be appreciated. Thanks!
Unless you have your overspending under control, I would not do this. Too many times people consolidate and that frees up the CC's and next thing you know the CC's are back up to their old high balances and now you've got a consolidation loan on top of that.
If you were to consolidate, cut up and cancel your old cards immediately so there is no temptation to use them and do not apply for anymore.
Your best bet is to pay the minimums on all but one card and throw all the extra money at that card and when it's paid off move to the next one.
thanks, I only have 1 cc, and once it was paid off I would not use it. (afraid to cut it up for fear of an emergency?)
I only work part-time and th e minimun payment is close to being all I can handle right now.
I guess I need to really weigh my options if I have any?
Quote:
Originally Posted by skahar
Unless you have your overspending under control, I would not do this. Too many times people consolidate and that frees up the CC's and next thing you know the CC's are back up to their old high balances and now you've got a consolidation loan on top of that.
If you were to consolidate, cut up and cancel your old cards immediately so there is no temptation to use them and do not apply for anymore.
Your best bet is to pay the minimums on all but one card and throw all the extra money at that card and when it's paid off move to the next one.
thank you, I guess I should get all the details first from the bank before I consider it. I was looking forward to paying off the cc early, then having a lower payment and lower int rate.
in what ways is it a scam? what "terms" should I watch out for?
Quote:
Originally Posted by Tightwad
Unless you can't handle the debt you have now the way it's structured I'd give these "offers" a wide berth. The second you consolidate the terms of your debt will change.......in the banks favor.
thank you, I guess I should get all the details first from the bank before I consider it. I was looking forward to paying off the cc early, then having a lower payment and lower int rate.
in what ways is it a scam? what "terms" should I watch out for?
There is no reason whatsoever that you can't pay the CC off early unless you are unemployed. If you can't pay large chunks then "nibble it to death" by adding as much as you can extra to the minimum even if it's only a buck or two. JUST KEEP STEADY AT IT OR THE EXTRA WON'T HELP.
Paying the CC early will also have the effect of giving you a much lower interest rate on what you already owe so git-r-done!
I follow a simple philosophy when it comes to borrowing money........"Borrow long, Pay short".
In other words borrow for a longer period of time than I need so I have wiggle room in troubled time....then pay off early to give me that effective lower interest rate.THIS TAKES GREAT PERSONAL DICIPLINE SO DON'T DO IT UNLESS YOU HAVE THE GRIT TO STICK TO YOUR PLAN!!!
thanks, I'll try. I had been able to pay very large chunks of my cc before, now though, just little more than minimum, but I do it steadily and sometimes early.
At least I am only paying 9%, which is better than a lot of my friends I talk to.
Quote:
Originally Posted by Tightwad
There is no reason whatsoever that you can't pay the CC off early unless you are unemployed. If you can't pay large chunks then "nibble it to death" by adding as much as you can extra to the minimum even if it's only a buck or two. JUST KEEP STEADY AT IT OR THE EXTRA WON'T HELP.
Paying the CC early will also have the effect of giving you a much lower interest rate on what you already owe so git-r-done!
I follow a simple philosophy when it comes to borrowing money........"Borrow long, Pay short".
In other words borrow for a longer period of time than I need so I have wiggle room in troubled time....then pay off early to give me that effective lower interest rate.THIS TAKES GREAT PERSONAL DICIPLINE SO DON'T DO IT UNLESS YOU HAVE THE GRIT TO STICK TO YOUR PLAN!!!
I'm getting calls about a debt consolidation loan (5% interest rate) from a legitimate, credible bank I belong to.
I'm wondering if anyone here has done one and if it helped them out. I would like to pay off my cc debt and then have a lower monthly payment. Does this sound like something I should consider? Currently, I am only able to make my minimum (plus a little extra) payment each month.
Any insight would be appreciated. Thanks!
What's your current interest rate? What expenses would you incur in transferring the debt to the bank? They may or may not charge a %-age of the amount transferred as an up-front fee. Most credit cards do this.
*Provided* you don't charge up more debt on the credit card, transferring the existing debt to a lower APR makes sense. And I agree, don't cut the card up, hold on to it for unexpected but *necessary* expenses.
The fact that you are making a little more than the minimum payment is good, it would be better if you paid a good bit more than minumum, but whatever.
Good luck with whatever you decide to do.
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