Which is better, a debt reduction serv that lowers interest & payments or to take out a loan to pay off all?

Answer 1

Take out a loan if you can. It will doubly benefit you as it will be another tradeline on your credit report and get you a lower interest rate than you're paying on your cards.

Answer 2

It sounds like you're really in a hurry to pay it off. I used to be in your shoes ones, but now I don't have any credit card debt. Here's some info to think about. Most debt reduction services will charge a fee for their service. They will call all your bill collectors and negotiate the lowest possible monthly payments that's acceptable by each of them. Then, the debt reduction service will add them all together; and you'll get your consolidated monthly payment plus the debt reduction services fee and their interest rate. I tried it once and it didn't work for me. The balance on the total amount of debt owed kept growing because the interest rate accrued monthly and was higher than the my monthly payments. As with taking out another loan, I don't recommend this either. I just don't think taking out another loan to pay-off an existing debt will solve the problem if you're not disciplined to paying your debts on time in the first place. Here's what I did: Close your accounts!!! I know that Consumer Credit Counseling would say not to do it on an old credit card if you're planning to buy a house to show your credit worthy. But, if you're making alot of late payments, then you're not credit worthy anyway. Call your creditors and tell them that you can't make the payments they ask for and negotiate a payment that you can afford per month. Get it in Writing!!! If you have a little money saved, sometimes you can negotiate with a bill collector on a one-time payment to satisfied a debt. I did it once, so I know it can work for you. And again, Get it in Writing before you send them any money, then send it certified mail with a return receipt just in case they don't want to report to the credit bureaus that the debt's paid-off. If all else fails, don't take-out anymore debts. Wait 7-10 years and the debts will drop-off your credit reports.

Answer 3

Debt reduction services get paid (you pay them) to negotiate with your creditors to lower your interest rates, then they pay off your debts and combine them all into one lump sum, which you then owe them at one payment per month rather than all the payments you are making to several different creditors. This seems appealing to some who are incurring monthly late charges on multiple accounts and are having all the dtress that goes with all of that. But the bottom line is that while using one of these debt reduction services may reduce your stress, it will cost you more. If you can get a loan and pay off your creditors without a debt reduction service, you'll be much better off doing that.

Try borrowing at
http://www.prosper.com/ instead of borrowing at a bank. It is ordinary people like yourself lending money from their savings accounts to earn interest just like a bank would. You put up a profile and tell your situation. Many people fund your loan with $50, $100, $200, etc. bids, until the whole loan is funded. Then they bid on the interest rate until the auction is over. So, someone like you may ask for $15,000 at an interest rate of 22%, but by the time the auction is over and everyone has bid, you get the $15,000 at 15%. The rate you end up with depends a lot on your credit score and debt to income ratio of course, just like with any lending institution. But using Prosper (as with any bank) will improve your credit score as you pay down the loan.

Answer 4

Take out a loan to pay all off but do not give them full payment if the accounts are delinquent. You can get a loan in conjunction with a debt settlement service. They can usually get 50 cents on the dollar for delinquent debts. Check out the free evaluation form at the source website.

Answer 5

I agree with the above answer. Debt consolidation services only help to negotiate existing debt and more often than not, it takes longer to pay it off (because they have negotiated a longer term in exchange for a lower payment) and it ends up damaging your credit. Sometimes, this is the only way out for people. But, if you have the means to get a loan to pay it off then this is certainly your best option as it benefits you two fold as described above.

Answer 6

Take out a loan if you can and try to pay all the debts and it will help you more .
To know more you can visit
http://geteasyloans.blogspot.com
and
http://creditcardbiz.blogspot.com

Answer 7

Until you start spending less than your earn, NEITHER will do you any good. Once you do, you can just use the extra money to pay off your existing debt.

Answer 8

Use your tax return to pay off your bills every year rather than taking that trip to Mexico on the Carnival cruise line...