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3 Responses to “Debt consolidation should I consider it or not?”

1. Julianna G (Duck with a gun) Says:
   January 31st, 2010 at 6:45 pm

   Your best option if you feel you need to consolidate the debt and you have the credit to do so, is to take out a low-interest personal loan, pay off all the cards, do something to prevent yourself from using them again and running the debt up again (that is crucial! Don’t do debt consolidation without this step!) then pay off the loan. This is only effective if overall you are getting a lower interest rate for the loan than for the credit cards.
   Do not (can’t say it enough) go through so-called credit counselors. These companies generally charge fees to negotiate lower debts for you, but the way they go about doing it is to let all your accounts go delinquent, then negotiate with the creditors for lower payments. This seriously hurts your credit. Even if they are not this dirty and actually pay your debts on time, the deals they negotiate with your creditors typically come with negative feedback on your credit report.
   The very best way to do it, if you can manage it, is to pay off your highest interest card first, then work your way through the other ones. You do this by paying the minimum payment on the lower interest ones, then put all excess money you can afford (an extra $200 per month, for example) into the highest interest one. Once it’s paid off, you take the extra money you were paying on the high interest one, add it to what the minimum payment for that card was, and add that to the minimum payment for the next highest card. This is a lot of work, but ultimately you pay less money on the interest.
   This is only the best option if all your interest rates are fairly low.
   Like I said before, if you can get a lower interest loan rate for an amount that will pay off the cards, do that. Try not to do it through a debt consolidation company, as there are very few which are reputable. If you can do it through your own bank or a loan company you trust, that is the best way. This way, you’re not paying an extra fee for someone else to give you a loan to pay off your debts. If you’re already having trouble paying your bills (even if you’re managing to do it now), that won’t help you in the long run.
   I will tell you, though, if you can get your own loan to pay the stuff off, it can be a really great thing. I had my identity stolen a few years ago, and ended up having all my cards defaulted up to the 30% rate because the payments got returned when the thief cleaned out my account. A friend took out a loan in her name (since my credit was destroyed) and paid off the entire amount, then I paid the loan payments. We went from making roughly $1000 per month in payments (and getting hit with a lot of fees, finance charges, etc) and only seeing about $400 of it go toward principal, to paying about $450 a month and seeing about $400 of it go toward principal. We were then able to pay double payments since we’d been paying that much anyway, and we paid off $10,000 worth of debt in a year. It was absolutely fantastic, and we wouldn’t have been able to do it that quickly otherwise, but the key thing there was that our lender (both the friend and the bank she went through) was one we were familiar with and trusted not to fleece us out of our money. Our credit score has gone up 85 points since then, and continues to rise every month. DO NOT go through a debt consolidation company. Take out a private loan. You can be more sure to be able to trust it that way.
   References :

2. Mia Jacob Says:
   January 31st, 2010 at 6:58 pm

   Debt consolidation can be a great form of debt relief to start tackling your debt – whether it’s just lowering your rates, getting a better loan, or cutting your payments to get debt free faster. It is important that you know what your options are and what your goals are before choosing a debt consolidation program or company.
   Debt consolidation services can help you consolidate your varying debt into one manageable payment and even establish a payment schedule for you and your creditors. It is better you seek help from any reputed debt relief company to choose the right debt consolidation option matching your financial health.
   References :
   http://www.bills.com/debt-consolidation/

3. Give Me a HUG! Says:
   January 31st, 2010 at 7:32 pm

   See http://www.esuperfind.com/lowermybills.php?id=app100
   they are approved BBB, website has Verisign logo etc etc
   References :

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