Which is a better route? A “debt- consolidation loan” or a “personal” to pay off credit card bills?
by admin ~ July 19th, 2008 . Filed under: Personal Finance .
DEBT asked:
How does either loan affect credit scores etc…?Which one tends to get the better interest rate? Any reccomendations on what financial institution to go through? How much money do you need to make to take out approx. 10k? Any other info you can provide would help out a lot!
Gavin Palisi
How does either loan affect credit scores etc…?Which one tends to get the better interest rate? Any reccomendations on what financial institution to go through? How much money do you need to make to take out approx. 10k? Any other info you can provide would help out a lot!
Gavin Palisi
July 19th, 2008 at 9:04 pm
a personal line of credit is hard to come by, ask the bank which you even qualify for. better to get two jobs and pay it off
July 22nd, 2008 at 8:43 am
Your not solving your problem. Your just relocating it so it looks like it is in check.Just pay off your credit cards and then cut them in half and throw them away.Your still going to have an interest rate no matter how you do it.Your best bet is to try and make as big of a payment as your budget will allow each month. and pay them off and I strongly suggest getting rid of them afterwards. Oh yeah one more thing don’t use them while your paying them off cause you’ll just be adding insult to injury.
July 23rd, 2008 at 5:05 am
If you are looking for a way to lower the monthly payment and pay down the CC debt quicker, and you own your own home, the best option is NOT the personal loan. The better option is to use a debt- consolidation using the equity in your home to transfer the CC debt into the home loan. The reason for this is two fold, one the interest on the home equity line of credit will be much lower than the CC bills. And secondly because the loan is coming from you home, and under the IRS tax laws state that any interst paid for a home loan is tax deductable you get to pay down your CC and get a deduction at the same time. Now to complete the package I would recomend that at tax time when you get your refund, DO NOT run out use it to go on vacation or as a down payment on a new car, instead take that money and apply it to the principal amount left on the loan so that you are able to pay that down more quickly as well.
There is one other benefit to doing this and that is, it will actually improve your credit score as well, becuase Home and Auto loans don’t weigh as heavy on your credit ranking as do CCs and personal loans.