I've got two credit cards that are maxed out and can't seem to make ANY progress by paying the minimum payment when I can. It's to the point now where I'll go a month without paying them and I just start racking up bullsh*t fees which put me even further into debt. I need to get help with this and I heard you can do debt consolidation through a credit union. I'm wondering if anyone here has done this and what their experience has been?
Will it drastically effect my credit score? Do I have to have an account at the credit union to do this?
2007-05-01 05:30:33 · 2 answers · asked by Winette 5 in Business & Finance ➔ Credit
Credit unions do offer much better rates than banks or credit cards but to be approved for a loan you will have to be a member.
Since you stated that you have missed some payments on your credit cards, most likely your credit has suffered. This will most likely require some kind of collateral before any credit union will approve this type of loan.
As far as your score is concerned, if you get approved for this loan all you are really doing is shifting debt from one place to the other so there should be no real impact on your score.
All I can say about the fees is you did read the terms and conditions before you signed the contract right?
2007-05-01 05:43:24 · answer #1 · answered by ? 7 · 2⤊ 0⤋
You have to be a member of a credit union to borrow from it. That means buying a share or a fraction of a share, and many credit unions are now allowed to have members from anywhere (you used to have to belong to the group served by the CU). It would be taken out of your loan if you're new and your application for a loan is accepted.
Credit Unions generally are better at giving their members good interest rates, but they are banks and cannot give their money away to people who don't pay their debts. Check your credit reports (all 3) and get your credit score(s). Then call your area CUs and ask if they would consider lending you however much you need.
They will ask you to deposit your pay by direct deposit into an account with them and authorize automatic debiting of the payment on your loan. The small print will say the account collateralizes the loan, or they may even explicitly get a lien on your deposit amount, which will have to stay at some minimum level.
If you get the loan, it should improve your score somewhat, but only regular payments over time will really help. If you can't pay the two cards off now, what makes you think you will be able to pay a loan which will include more interest?
The fees may be bullsh*t, but you agreed to them when you took the card, so you should consider how well you handle your money on your own. Get debt management help, and I don't mean the debt consolidation places. I mean places that teach you what to look for in loan or credit card contracts and what to avoid, and how to budget,
2007-05-01 05:51:56 · answer #2 · answered by thylawyer 7 · 1⤊ 1⤋