Should I consolidate my credit cards?

Question

I have 8 credit cards, all with large balances and very small interest rates. I was approved for a consolidation loan but with a pretty high interest rate. I want to do this loan because it is an installment loan which will be paid off in 5 years, where as the credit cards will be paid off in anywhere from 10-20 years (I can only make the minimum payments). Do you think I should take on this loan? I want to just because I know it will be paid off in 5 years, but that interest rate scares me (it's variable).

Just a little more information: the monthly loan payment is just as much as my MINIMUM monthly payments on my credit cards.

Answer 1

If a person has accumulated a large amount of credit card debt due to multiple credit cards, the need for a proper counseling for credit card debt consolidation can't be understated. Credit card debt consolidation counseling helps a person get vital insights into the facts that can help him get control over the credit card debt.

Credit card debt consolidation counselors are experts with a good knowledge of debt management, budgeting and behavioral patterns of credit card holders. These services are vital for those struggling to manage their credit card debts. Also called credit counseling or debt counseling the credit card debt consolidation counseling brings immediate relief to a credit card holder.

A person seeking credit counseling can get it from two types of organizations. The professional or commercial organizations, and the non-profit organizations. As depicted by its name or categorization, the commercial organizations charge money for their credit counseling sessions and consolidation help on the other hand the non-profit organizations offer free of charge services. Just because the non-profit organizations are free, it doesn't undermine their quality of service. The persons associated with such organizations are thorough experts and have lived the trauma of being under credit card debt themselves and hence bring their vital experience to the credit card holder.

When a person approaches a credit counseling agency, the first thing it will do is to take stock of the situation and get various facts about the credit card debt. The credit counseling agency collects data about the income, expenditure and spending habits. It will guide the credit card holder about budgeting benefits and try to inculcate good financial habits. Read more from: http://www.credit-card-gallery.com/article/353,Credit_card_debt_consolidation_and_credit_counseling_great_tools_to_get_rid_of_credit_card_debt

Answer 2

This doesn't make any sense really. If you are paying higher interest on the loan then it should take you longer to pay off OR cost you more per month. Unless you are paying fees on a monthly basis from your cards on top of the low interest rate. The right way to do this would be to pay the minimum on each card and pay as much as possible each month toward just one card at a time (preferably the one with the highest interest) until you slowly knock them off one at a time. Once you get going and start paying off a card you will have that much more to apply to the next card, etc, etc. hopefully you will find it easy to pay off cards once you have done 2 or 3.

Where are you getting this 5 year variable rate loan
???

Answer 3

Are you able to get the consolidation loan at a fixed rate? Are you able to not use your credit cards if you get this consolidation loan? If you don't use your credit cards, this loan would be paid off in 5 years (less, if you make more than the regular payment). Try for a fixed rate for the consolidation loan but again, if you use your credit cards, you've defeated the whole purpose.

Answer 4

It is nice that you were approved. Ask them to send you
an approval letter with all the details including interest amount.

Get copies of your credit reports, and take it to your local
bank (where your checking account is) and negotiate

I wouldn't do a variable rate, Or call the people who approved you and tell them you want a fixed rate or
they can make ZERO dollars and you'll go elsewhere.

www.creditinfocenter.com

Answer 5

I agree with the previous answers. Something doesn't add up here. What do you have in writing about the new loan? It must have a teaser rate or something?

There is no point in switching to a higher rate. Just get some discipline and self-control.

Answer 6

If you will have adequate fairness on your residence, you will have to pay down or off your bank cards with the money you get from the refi. The curiosity fee will likely be bigger too! Rates for refis locations low as they have got been within the final four years. The curiosity you pay on a loan or Line of credit score in your residence won't most effective be fair however is tax deductible. You win the entire approach round. If you wish extra information, I can aid you or touch a loan mortgage dealer for recommendations. He/She can examine your monetary difficulty and advocate methods to reap your targets.

Answer 7

Don't do the debt consolidation. A variable loan right now is not good. The market is too unstable. It is great you are looking at reducing or eliminating your debt. There are some great solutions for reducing debt at http://www.your-credit-solution.com/debtsolutions.htm .

Good Luck!