Shoud I get a consolidation loan to pay off $3600 dollars in debt.?

Question

i am unemployed but searching for permanent job. i am due to start my temp job in 2 weeks at $10/hr. don't have any bills except my cell phone and dsl. Should i take out this loan to pay off credit cards. they call my phone at least 10 times per day and i thought this might be the smartest way to pay off the loans and raise my score. Just paying off the cards will increase my score by 30 points. at the end i won't be able to get a decent credit card to raise my score. paying off my card with a loan allows me to get rid of the credit card debt and build my score by paying regular payments to citibank. I shope that this will raise my score. the consolidation loan term is 36 months. What do u think? please give some advice if you have any?

Answer 1

Its probably a good idea, but weigh all the factors. First off, I assume by getting the loan you will save money. Make sure the interest rate on the consolidation loan is lower than on the different credit cards (if not why bother, you will just have more trouble paying off the consolidation loan). Also, what are the fees on the loan. Take them into account (ie if the interest rate is a little lower but there are steep fees to getting the consolidation loan - again, why bother. if you can't pay off the cards before you won't be able to pay off the loan either).

Still, typically consolidation loans will cost less and will set up a reasonable way to pay off these debts. So if you are sure you can swing the payments with the loan, and it will say you money - then of course get the loan. If not, then don't bother - just pay off the debts ASAP and make minimum payments when you can to get them to stop bothering you.

Answer 2

Without any income, you will not be approved for a loan. How do you plan to make payments if you are a housewife? You do not need a consolidation loan, you need to be out of debt and stay out of debt. A loan is just more debt. You need to find a job to make some money even if it is part time and start paying off your debts smallest to largest. You will create a debt snowball by paying minimum payments on all debts except the smallet one and putting all other money on the smallest debt. When you pay that one off you put all the money to the next debt until it is paid off and so on. Interest rate is not important - it is all about smallest to largest to gain momentum in paying off your debts. You also need to cut up all credit cards so you are not using them and sell anything you can to get extra money to pay on the debts. EBay and Craigslist are free places to sell your stuff and a garage sale can bring in a couple hundred dollars.

Answer 3

Never get a consolidation loan to pay off your credit cards, NEVER.

1.Credit cards are unsecured loans, which means that all they can do is threaten you but they can’t come and take anything away.
2.You can stop them from calling by simply telling them not to call and to start communicating with you in writing. Write down the date, time and contact information of the person you talked to them know you will report them if anyone from the company calls you again
3.Tell them you situation and off a direct buy off X cents on the dollar. You say you owe 3600 but you don’t say over how many cards? Let’s say you owe card Y 2100 in principle so offer them 70% of that (1470) in cash to pay it off. If they agree get it in WRITING.
4.If you cannot do something like that then stop paying on each card and start paying all of your extra income on the smallest debt first. Pay it biweekly if you have to but pay everything you can on it till it’s paid off, then go after the next one.

Your credit is already in the hole and getting that loan is not going to do anything for you but prolong the time you will spend digging yourself out. You need to become a minimalist for the next few months. If you are working 40 hours a week at 10per hour then you should be taking home around 270. If your phone and DSL are 200 a month then you should have a disposable income of 840. Take off 60 a week for food/gas and your at 600. Put that toward the lowest card first and you should be out of debit in 8 to 10 months with a better CS then if you would have got the loan.

Answer 4

Uhhh you don't have any bills except cell phone and DSL?? But you have collectors calling over credit cards. Those credit cards ARE your bills too.

You have been living beyond your means. Set up a strict budget. Eliminate all the extras -- cell phone, eating out, high speed internet, etc. Take every penny you can squeeze out of that budget and pay the highest interest rate card, while paying minimum on the rest. When the highest one is paid off, go to the next till all the cards are paid in full.

When you get them paid off, only charge what you can afford to pay in full at the end of the month. Even if you are only working a temp job, you should be able to do this and clear up your credit card debt in less than 3 years.

Answer 5

Check on the new interest rate, most likely I would consolidate.

Then cut up and throw away those cards. Use Credit cards only up to the point that you can pay them off at the end of the month, beyond that, you are digging a deep credit hole that will be expensive to get out of.

Be careful, the media is pushing consumerism at a record pace, try to always live within your means, or below.

Good Luck!

Answer 6

consolidation loans are okay to get, just check the APR and make sure it is lower than what you currently have on your credit card. If it is higher then it isn't worth it.

Also, do not go through someone who calls you b/c more than likely it is a scam. Go to a bank and talk to them about it. Never give information to someone who calls you.

Answer 7

Yes

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.
http://debt-trap.com/category/Debt-Consolidation-Basics.html

Answer 8

Why don't you find a 0% card to transfer to once you get a job. It'll be cheaper in the long run.