What are the consequences of getting a debt consolidation loan? Does it reflect badly in my credit report?

Answer 1

Ok, I have to answer this.
Lets define a consolidation loan. It is money borrowed from a lender secured or unsecured. The money from the lender will totally pay your credit cards off 100% Consolidating all of your credit balances. That is what a consolidation loan is. Does not ding your credit.

This is a very dangerous thing to say but if you consolidate keep your paid off cards open.... CUT them up don't use them. It does lower your score to close them.
If you don't think you can keep from using them then close them. lowering your score a bit is better then charging your cards back up.

Since I have been in the debt industry I hear people use the word consolidation in reference to consumer counseling or settlement. That is not true consolidation. What your really doing . In ccc your consolidating the payment and not the balance
Dings your credit.

If your in financial trouble then I would say try the ccc or settlement They are a good option if your the right client with the correct circumstances. I can't stress that enough. Make sure your dealing with a company that has your best interest at heart and not there to just make a buck.

If your talking about a true consolidation loan and your getting a good % rate go for it. Make sure your rate is better then what you have. Work harder and get it paid off.

No matter what anyone tells you, anytime you do any less then pay your creditors 100% your credit will take a hit.

Kourtnie Donihoo
Prosperity Financial

Answer 2

It does. I got a debt consolidation loan from a credit union. When they gave me the loan, they said I had to close all the accounts, it is part of the deal. COme to find out, when you close an account it is bad. They want to see open accounts in good standing with more open credit than used. the amount of time an account has been open has merrit and closed ones suck. Plus, I later realized if I had just taken the same money and continued to pay the balances WITHOUT using the cards, I would have probably done better due to the interst rate with the consolidation loan. My advice is to pay as much as you can on all your open credit cards and destroy the cards. It will look sooooo much better. Plus, pay all your bills ON TIME, and never up to 30 days. Learning from experience right now:)

Answer 3

Instead of shifting your debt around, bite the bullet and pay it off.

Make yourself a strict budget. Eliminate all the extras -- cell phone, eating out, new clothes, premium cable and internet, etc. Take every penny you can squeeze out of that budget and throw it at the highest interest rate debt, while making minimum payments on the rest. When the highest interest rate debt is paid off, move to the next till they are all paid in full.

You should be able to pay off all you debt within 2 or 3 years if you really work at it. Youl'll end up with a good payment history and improved your money management skills.

Answer 4

What you should look into is a debt management program--I went with Debt Counseling Corporation--they were great. My credit is better then ever because the credit card company's still report every month to the credit bureau's and what is good is that my credit cards are closed so now I don't run the risk of getting into trouble again. A friend of mine took out a loan to pay hers off and now she ran them back up again and she still has this loan. She is now working with the company i went with because she is so sick of the circle she is going around.
You should check them out:

http://www.debtcounselingcorp.org

Answer 5

I have found a website which answers your question and the website is in my profile. Auto Loans, Bad Credit Loans, Business Loans, Home Loans, Personal Loans, Student Loans, Car Loan, loan consolidation, debt consolidation Etc,

You can also improve your credit score, fix bad credit, get credit cards, repairing credit, building credit etc.

You may get what you want in the website. WEBSITE IS IN MY PROFILE. You can go to my profile by just clicking out my name in the right.

Thanks.....

Answer 6

1) whatever company you get to help you...
takes a LARGE part of your pay to pay off your debt.

2) the urge to make more debt to make up for the money they 'free up'.

BUT, they help keep the creditors FROM harassing you & sometimes can get the interest rate lowered therefore, helping you to get out of debt quicker.

Answer 7

that's a tricky question