Is it better to take out a personal loan and just pay all the old charges and collection accounts off? I'm trying to take care of my bad credit by making monthly minimum payments to creditors to relieve old debts, but I have to wonder if it wouldn't be easier to pay everything off with a loan and make that one monthly payment.
2006-12-27 08:18:24 · 5 answers · asked by Mrs. Vermillion 1 in Business & Finance ➔ Credit
The best way is to get a loan and have one payment, if you can get the loan. Obviously if the loan is a high interest rate, you defeat the purpose, so be careful there.
2006-12-27 08:26:04 · answer #1 · answered by btpage0630 5 · 0⤊ 0⤋
It would definatly be easier to take out a personal loan. I had to do this too. I had 5 credit cards 2 with multiple thousands of dollars racked up and high interest rates on top of my car payment, insurance and student loan payment. I went to my credit union and was able to get a loan to pay off everything (except my student loan and car because those where on loan through them) and now I just make one monthly payment $150 a month and my car payment and insurance.
It's easier than juggling around due dates and varying interest rates. Also, I know that I am making progress on getting out of debt and so it also gives me a peice of mind.
2006-12-27 08:30:09 · answer #2 · answered by minicoop_jen 3 · 0⤊ 0⤋
It would be easier to make installment payments on a personal loan, but consider that your credit score is likely very poor at this point. As a result, your interest rate on a loan (if you qualified) would likely be very high.
You may wish to focus on one account at a time and pay it off in full. Usually the newest accounts or those facing legal action are the first priority.
2006-12-27 08:22:14 · answer #3 · answered by Anonymous · 2⤊ 0⤋
go to consumer credit counseling if its real bad - or just save your money and pay off your accounts 1 by 1.
go to www.annualcreditreport.com and get all 3 bureaus for free
2006-12-27 08:24:53 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Don't pay full price however; get settlements; no reason to pay full price for late fees and other charges, high interest.
2006-12-27 08:47:32 · answer #5 · answered by Anonymous · 1⤊ 0⤋