Question : Bank loan or debt consolidation program for credit card payoff?
Due to a family tragedy, my husband and I are currently in $26,000 of credit card debt. All of the payments are current and the cards are paid on time with the accounts still open (we are not still charging, though). We are looking to seriously pay this down before the interest eats us alive. My husband wants to take out a bank loan and pay the cards off that way, but I am wondering about the debt consolidation programs you hear about (I know some of those are scams and some are real). Any advice or experience?
- asked by honhill
All Answers:
Answer #1
They may be the same thing.First look at the fineprint on your credit card. Some credit cards willhave a penalty of paying to much to soon.If that'snot there, then you probably want a bank loan. Again, you might have a penalty of payng the bankback too soon. The bank may loan you money forless than a debt consolidaton company.If you can'tget a bank loan, then you could alway try a debtconsolidation company.
- answered by gregory_dittman
Answer #2
A consolidation loan is the ideal solution basedon info provided. The interest rate will be lowerthan credit cards are charging, the minimummonthly payment would be less and you couldprobably double up on the monthly payments inorder to reduce the effective rate and settle thedebt quicker.A consolidation loan will not hurtyour credit rating.If you do not qualify for afull consolidation go for as much as possible andresolve outstanding high rate cc debt as soon aspossible.Debt consolidation programs are oftenregistered on your credit report and should not beused unless you can not resolve the problem onyour own. Entering into a debt consolidationprogram should be a last resort.
- answered by CanadianDots.ca
Answer #3
A bank loan will require some form of collateral,like a house. If you can't pay the loan, you losethe house.Debt consolidation will trash yourcredit score. You are better off negotiating witheach credit card. Mention to them that you mayhave to declare bankruptcy due to the high rateand could they lower the rate. In most cases,they would do that.
- answered by Steve R
Answer #4
If a person has accumulated a large amount ofcredit card debt due to multiple credit cards, theneed for a proper counseling for credit card debtconsolidation can't be understated. Credit carddebt consolidation counseling helps a person getvital insights into the facts that can help himget control over the credit card debt.Credit carddebt consolidation counselors are experts with agood knowledge of debt management, budgeting andbehavioral patterns of credit card holders. Theseservices are vital for those struggling to managetheir credit card debts. Also called creditcounseling or debt counseling the credit card debtconsolidation counseling brings immediate reliefto a credit card holder.A person seeking creditcounseling can get it from two types oforganizations. The professional or commercialorganizations, and the non-profit organizations.As depicted by its name or categorization, thecommercial organizations charge money for theircredit counseling sessions and consolidation helpon the other hand the non-profit organizationsoffer free of charge services. Just because thenon-profit organizations are free, it doesn'tundermine their quality of service. The personsassociated with such organizations are thoroughexperts and have lived the trauma of being undercredit card debt themselves and hence bring theirvital experience to the credit card holder.Readmore 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
- answered by dakeen forx
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