Debt Consolidating Loans?

Question

would anybody reccomend this or is it a bad idea?

Answer 1

It is usually a good idea if you can get a lower interest rate.

I recommend:
1) Do a comparison on the interest rates between all of your debts and the cosolidation loan's interest rate.

2) Remember to take into account "out of pocket" costs such as loan fees and/or appraisals (if you are using a equity loan)...etc.

3) Also be mindful of the monthly payment amount. Since loans are amortized over time, a shorter schedule will mean a larger monthly payment. If you are used to paying the 2%~4% monthly minimum on the credit cards, you will find that a consolidation loan will have a higher payment. This is a good thing, however, because you will be out of debt much faster and pay less interest. Just make sure it is within your ability to pay

4) Also, make sure you do not pile on more debt after the consolidation. The idea is to consolidate and refinance existing loans so you can reduce debt and pay lower interest. It will hurt you in the long run if you charge up more credit card debt after you consolidate.

5) Just FYI, if you have a $25k credit card debt and pay just the 4% monthly minimum, it will take you over 15 years to pay it off. If it's the 2% monthly minimum... it'll take about 50 years... and you would've paid over $41k in interest (based on a 15% interest rate).

6) You can also give a try at online person to person lending websites such as: http://www.prosper.com or http://www.lendingclub.com

Answer 2

If you can consolidate all debts into one lower interest loan which you pay on time it's a great idea. The problem is that many people then free up their credit cards and run them back up again and again. You've got to stop the spending until you are debt free and then use moderation or you'll never own anything. Do not cancel the credit cards you pay off... keep them as history. You don't have to use them. Leave the accounts open with a zero balance (unless you are paying annual fees). Try to get your debt consolidation loan interest as low as you can and then sock every dime you can into getting control of your money and of your life back.

Answer 3

Just Try:
http://www.proloanz.com/Debt_Consolidation.htm

http://www.topamericanmortgage.com/debt-consolidation-loans.asp

Answer 4

That would depend on the terms, length of payback, interest rate etc. If using to consolidate credit card debt insure that you leave those credit cards paid off or you will just dig yourself deeper in debt. If the consolidation loan is a second mortgage then the interest is tax deductible, again the downside of these loans and most widely used reason is to pay off credit cards, and most people end up using those cards again, if you have fiscal restraint it will help, if you do not then it is not a good idea.

Answer 5

Opt for a debt consolidation loan: The easiest method of getting a debt consolidation loan is to utilize the equity of your home. Equity of your home is calculated and determined by the difference in the amount you have paid and the amount you owe. If the amount you have paid is more than the amount due, you can use it as collateral. This allows you to borrow money on lower interest rates. Besides, you also get tax benefit on this type of loan. Consult your tax advisor before opting for this loan.

Answer 6

It all depends on the current rate of interest and monthly payments you are now making and what you would be making if you consolidate.

It also depends on the fees to refinance.

Very often times there are better methods to accomplish what you want if you get the proper advice.

Let's say you have equity in your home and you could take it out to pay off other debt.

But instead, you take the money out (with a plan of course and a good financial planner and attorney) and invest that money in order that it makes enough to cover all the payments. That way, the debt in effect gets paid off and you get to keep the money in the investment also.

Answer 7

I would say it is a bad idea, buy getting into debt then taking on another dept to pay the other debts off. You must break out of this circle has soon has you can. Instead of taking on more debt,talk to the debt companies if you are having problems. Please have a look at the links and rethink the idear

Answer 8

It can be a good idea, but you have to be VERY careful of the terms of the loan, interest rate and the other terms of the loan.

Answer 9

Talk to your bank or credit union first

Answer 10

try reading this resource, you might get your problem solved

all d best