Are consolidation loans the answer to debt problems?

Answer 1

No.Thats basically just another loan.

Answer 2

No. If you've got this far to even consider a consolidation loan then you are obviously not living within your means and are spending more than you are earning. That is not good news, and a recipe for bankruptcy. If you're prepared to actually rip up all your credit and store cards and take a consolidation loan then it might work, but often you'll find sooner or later that you find a reason to need to go back to your cards again and that within a couple of years your monthly bills are even more than they were before - paying off your consolidation loan and your new credit card bills. Banks don't care, they'll keep lending you it without really checking that you can afford it.

Sit down with someone at the Citizens Advice Bureaux and work out exactly where you are at with your finances - what you earn and what you spend. You will probably be quite shocked and find that an Individual Voluntary Agreement (IVA) or even Bankruptcy might be the answer rather than getting another loan.

Answer 3

Many people looking for debt consolidation loans with bad credit profiles contact their bank or credit union first. And while it makes sense to do business with an institution that you already know and trust, you may be disappointed if you get turned down for a loan. Banks and credit unions offer a variety of traditional loans and other products, but they typically don’t cater to debt consolidation loans for people with bad credit. Banks and credit unions often use a risk-based pricing model, meaning the bigger the risk they think you are in terms of repaying the loan, the higher the interest rate they’ll charge you. So even if you get approved for a loan, you could end up paying more in interest and fees than someone with better credit. So whether you are approved for a loan at a high interest rate, or you get turned down because of your credit, remember there are plenty of other options for debt consolidation loans for bad credit. Just keep doing your research and contact other lenders and debt relief companies before signing any paperwork.

Answer 4

Generally, NOT. You cannot borrow your way out of debt. If you're consolidating a bunch of credit cards, then the ONLY way a consolidation loan will do you a speck of good is to cut up and NEVER renew those credit cards. What usually happens is that people keep the cards, then wind up using them again.. and then they are paying double.. the OLD debt in the consolidation loan, and the "new" debt on the credit cards.

Answer 5

This is one answer but will not necessarily help you long term and may even makes things worse.

The best way is to make a note of EVERY single thing you spend then cut back the inessential items or services.
Some people haven't got a clue how much they are spending each month or week and don't know where the money goes.

It's relatively simple: if you spend more than you earn, you will get into debt. If you live within your means, you'll generally be OK. However, always pay off your debts FIRST so you aren't paying any interest.
Interest is just like giving money away unnecessarily. Take back control of your own spending.

Answer 6

Yes they are, i do this every day at work adn it makes a hige difference. If you are paying out different amounts every month on different items of credit (loans, credit cards etc) it is a great idea to take out a loan to pay them all off and just have one payment a month that 99.9% of the time will be cheaper than what you are collectivley paying for all your other debt.

If there is too much debt then a debt management programme can be equally as good.

Need any help then just email me.

Answer 7

Not really. These are made to look attractive by offering lower payments, the catch being over a much longer period. You therefore end up paying a lot more than you otherwise would, and it can take years to clear.

The only way to go is to give up some of the luxuries of life, and try to pay off your existing debt as quickly as possible.

The key here is planning. Keep an accurate record of your income and outgoings, so you know exactly how much you have to play with. Bills and debts come first, everything else is secondary.

Answer 8

Consolidation loans is definitely a great start. Consolidation companies contact your credit card companies and make arrangements for repayment. For the future you may want to consult with a financial planner to set up something for your spending habits.

Answer 9

Sometimes. Depends on your situation. If you have a lot of high interest debt then you should combine it into one lower interest loan for sure. Post some details as to your problems and you might get more specific answers.
If you do need a loan though, here's a good loan site:
http://loan.divinfo.com/

Good luck!

Answer 10

Id have to say from experience that no it will not help. The best way is to contact a charity based dept company and they will do a spenditure form with you to work out what you can afford to pay each month. They also notify your debters and using legislation can stop them from adding interest. It sounds complicated but believe me once its done its so much easier and less stressful. I'm with CCCS which is a charity so it does not charge you for the help they have been realy great with me and my partner. Good luck and hope that one day you have that debt free stressless life!!!!

Answer 11

They can be if your existing loans are high interest loans like credit and store cards.

Consolidation loans can be a lot cheaper way to repay your loans in terms of paying interest.

Just be careful you don't take out one of these loans then continue spending on the cards!!!...That way lays disaster!!!!!!!!