I have about 9,500 worth of debt! I am not having trouble paying my bills, but my $$ is tight!! Should i consider doing a D.C? Will it help my credit? Who would be someone reputable to go through?
2006-12-27 10:20:54 · 7 answers · asked by westaygrindin 1 in Business & Finance ➔ Credit
I had about $25k in debt and I used debt consolidation. As long as you have not had any late payments or any defaults - your credit should be ok and not suffer. Debt consolidation means that your credit cards will be closed by the vendor and as a result your credit will take a minor hit, but will rebound over the period that you pay it off.
It worked great for me and I am now debt free. But make sure to go with someone who is legitimate. I went through a company called ByDesign - which worked great for me. I live in Los Angeles.
Check your local BBB for a rating of the credit consolidator. If any company demands a major amount of money up front to help you out (more than $100) don't even bother with them. They also should not charge you more than a very moderate monthly processing fee if any.
At no point should you ever and I mean ever agree not to pay on time so that they can make a deal with the credit card company. That will give you very negative credit ratings.
Always make sure to stay on top of the payments and make sure that the credit consolidating company is making the monthly payments on time.
2006-12-27 10:32:18 · answer #1 · answered by WhoMe 4 · 1⤊ 0⤋
Debt consolidation might be an answer. You could try your bank - this is what I did and I was amazed that they agreed to give me a loan! But, if you do decide to consolidate your debt, then make sure that you don't just use it as an excuse to keep on spending. The smart thing to do is to pay off your debts with the loan, cut up all but one of your credit cards (and leave that one at home for use only in emergency) and try to pay the loan back faster than the term. That way you truly will get out of debt and will be able to live debt-free.
This website has some very useful advice and links. Good luck!
2006-12-30 10:36:42 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You could try transferring the balances to 1 or 2 new cards that offer a 0% interest rate for a year or perhaps the life of the loan if you can. Or you can try for a personal loan to pay it off with. Just realize it is going to take you about 5 years to pay it off with proper planning. Don't charge up anymore credit card debt. I wouldn't recommend a Home Equity Line, if you don't pay your credit card bills, it affects your credit score, but if you can't make that new mortgage payment with the debt rolled in, say goodbye house.
A lot of people go that route, but I think that is the easy way out, and you don't really learn to live within your means and next thing you know you are refinancing again - I've seen it happen.
You can do it, with proper planning and discipline!
2006-12-27 10:32:13 · answer #3 · answered by GirlUdontKnow 5 · 0⤊ 0⤋
If you own a home and have any equity built up, the best thing is to take out a home equity loan, pay off your credit cards and cut up all but one. You may need one for an emergency. In PA it is still possible to get a home equity loan for under 6%, and you get up to 15 years to pay it off.
If you only credit card and personal loan debt, use the card with the largest line of credit and the lowest interest rate to pay off the others, then cut up all of the other cards.
2006-12-27 10:28:01 · answer #4 · answered by regerugged 7 · 0⤊ 0⤋
Consolidation loans are DANGEROUS. You lump everything in to one payment but most people continue to spend and re-accumulate the debt they consolidated. The your in real trouble. Only do the consolidation loan if your going to change you spending habits, otherwise you'll end up in big trouble.
After my consolidation loan failed (for the reasons listed above), I got motivated and payed off all my debts but the house, and I'm still working on that. Check out the debt snowball method on daveramsey.com. It worked for me.
2006-12-27 13:30:29 · answer #5 · answered by Sun and Sand 3 · 0⤊ 0⤋
Debt management will hurt your credit and most lenders will view it similar to a chapter 13 bankruptcy. As someone above mentioned, consider refinancing if you are a homeowner.
2006-12-27 13:45:04 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Have you tried online, the internet yet. Consolidation loans are everywhere nowadays, you just need to pick the right one.
2006-12-27 12:36:03 · answer #7 · answered by SEO 3 · 0⤊ 0⤋