Those consolidations are a bad idea. Concentrate on paying off the cards one at a time. Pay off the one with the highest interest rate first. Put all of your money towards this one card while paying at least the minimum payments on the others. Once it is paid off, go to the next, then the next until you are debt free.
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Tink, you might have to put your Roo's, Wallaby's and B-Rangs up as collateral too, so be prepared with all the paperwork before you venture to your villiage's banking hut.
Ha, got ya again !
Seriously, you might start on-line searching, but I would seriously only do that for general information. The first step that you should take would be to get a copy of your most recent credit reports … I'm not sure about what organizations to contact on the "Big Isle", but your local bank can help you there. Here in the 1st world (got ya again), we have three major credit bureau's and we can get one free credit report per year.
The point is, that if you have something bad or old on there that shouldn't be, you'll want to get that cleaned up first, or at least initiate the request to get it cleaned up (have the paperwork with you). The credit score will be hugely important in what interest you pay for a debt-consolodation loan.
There are a number of non-profit debt organizations here in the states … there are also a number of "Paid intermediaries" … there is a big difference. If they have a website and it's www.SOMETHING.org, it's a non-profit. Stick with them. They will be able to not only help you locate a reputable lender with a decent rate, but can also help you work out other arrangements with credit card companies, etc.
Credit companies are actually very willing to reduce the interest rate on your balance if you go through such a place. By doing so, you are demonstrating that you are interested in paying things off and very often, you'll set up an automatic payment plan directly from your bank account … the amount of the payments will be collaborated with you, the organization helping you and them.
Put it this way … the interest rates you pay are based on the costs of funds (i.e. the market interest rate) plus a risk premium. In such a case as this, you've significantly reduced their risk of default by setting up automatic payments and have demonstrated a willingness to repay so that's where the rate reduction comes from.
It's sort of common sense to pay off the highest interest cards first (remember that you should pay the minimums on all of them to avoid racking up late fees and damaging your credit), however, that may not really be THE ONLY best solution for some folks. Assume that you 5 bills with balances of $5,000 / $600 / $200 / $150 / $125 … rather than paying the mininum on all of them and then taking the "left over" available cash and dumping it all onto the highest rate one, consider an alternative: Pay the minimums and then take what you can afford to thow elsewhere and put it on the one with the smallest balance.
This way, in a month or two, you'll only have four bills. Then three bills, then two bills, etc. In reality, for most people, it's easier to manage that way for several reasons. 1) You have very tangible proof that you're making progress that you can sink your crooked teeth (got you again) into … there's a sort of satisfaction there, "Finally, got rid of that one!" … You attention get's more and more focused on just the one or two left … 2) You'll have time to establish regular payments on the big ones as well so your credit report will reflect this as well as the number of open accounts decreasing.
After you've paid one off, CLOSE IT !!!! The number of open accounts affects your score even if there is no balance on them. This will positively affect your credit score much more than uniformly decreasing the balance on all of them (people don't know this)
So: Step 1: Find out how you can get a copy of your credit report(s) and get them. Do this first as it will take some time for them to arrive to you. 2: Do some research to find a non-profit debt consolodation organization in your area and talk to a few of them. 3: Get all of your stuff together … get organized. A folder for each bill with payment histories, etc. Include a sheet of paper in each one that you update each time you pay a bill with Statment Date or Due Date, Balance, Min Payment, Payment you made, date you made it, Amount and Check Number.
P.S.
In the details of your questions such as this, you might be good to let people know that you're from the third world (got ya again) … Australia. Things are different there or other places and the preponderance of answers you'll get here are from the US, so people might assume that you're here … Example: I have know idea if TransUnion, Equifax and Experian (our big credit bureaus) even do Australia ! Hell, why would they ? Nothing there but rocks and dirt anyway . LOL (again!)
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Is there a better option? My credit union is offering a consolidation loan and telling me that the average in our area is about 13.87 percent.
A home equity loan if often touted as a good way to pay off credit card debt, especially in areas where homes have greatly increased in price; however, you should know that technically, the interest on such a loan is NOT considered deductible by the IRS unless the loan is used to improve the property. It's likely that you could claim it anyway without the IRS auditing you, but it could happen, and in that case, you'd have to pay any back taxes plus interest to the IRS. This is a position you seriously want to avoid.
Secondly, you're betting against your house that you can afford to pay this loan, Are you willing to close all the credit accounts if you take this loan, so you won't be tempted to run the balances up again? You won't have a way to pay them off again if you do.
Remember that you're possibly putting yourself in the position that, should you need to sell the house for some reason, that you'd lose the equity you've gained over however long you've owned it. Is this a good risk?
I have done this, and not long afterward, the prices of houses in my area dropped. I was stuck for quite a while until prices went back up, since I'd have to pay the balance on the first mortgage plus the balance of the home equity loan, and when prices finally went back up far enough that I could afford to sell, I got far less when I sold my house than I could have.
So, unless you can very quickly pay off the home equity loan, and you know you can resist using your other credit again, it's risky.
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I graduated a few months ago from college and am starting a new job in a few weeks. I've been going through my finances and looking into consolidating my student loans (about $35K). All of my student loans are alternative student loans, but can be consolidated. Unfortunately, for the last year of my degree program, I had to rely on credit cards for what the loans didn't cover, leaving me with some substantial credit card debt also. Is it possible to consolidate my credit card balances with my student loan consolidation. I would rather make one large payment on everthing instead of making smaller payments on all the different loans.
It will be difficult to consolidate your credit card debt, beacuse the student loan consolidation would work only with the student loans. If you try to get a loan to consolidate both those debts that its most likely that it would be classified as a personal loan, which carry a substantially higher interest rates.
You can get a free consultation if you enter your information at https://www.bills.com/studentloan/loan/
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I am thinking of applying for a consolidation loan to pay of my credit card debt. I owe much more than I can pay even though I have a full time job with a fair income. Has anyone out there dealt with a consolidation loan? Did it help you or not?
Please note-I am not asking for people to write in ads for their own credit counselling services, I have asked this question previously here and all I got was ads masked as answers. I am looking for an honest testimony of someone who is/was in a similar situation to mine if there is anyone out there wiling to share. Thank you.
I was in your situation in 1996. I took out a fixed rate loan in order to pay off about $15000 in credit card debt, a home equity loan against my (overly huge) house - not a line of credit, but a fixed rate loan with a 10-year term.
Within three years my ex-wife and I had run up all our credit cards again, and still owed over $8000 on the loan. Had we not made that mistake as many people do, the fixed rate loan would have saved us thousands. It took another three years to dig myself out of my half of that hole, and the second time I did it the hard way - lived in a trailer for the first four years of my second marriage.
Caution: Make sure you use a legitimate bank or financial service, there are a few fraudsters out there who would charge you huge fees or even just steal your money - but you seem to be a fairly wary consumer.
Now I’m going to plug an author - David Bach. He writes “The Automatic Millionaire” and “Smart Couples Finish Rich.” I’ve talked to several people who also liked Dave Ramsey’s books. The first one I mentioned is an easy read and not at all judgmental. The second is more comprehensive when you are ready for that.
Bottom line: A fixed rate consolidation loan can save you lots of money, but only if you change the habits that got you there in the first place.
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Is it possible for me to get a loan for some credit card debt? I have established credit and it is not the greatest but Im about 6,000 in debt with credit cards. I make about 2,000 a month take home and was looking for a loan so I can make one payment a month and pay off the high interest cards in the mean time. Any recommendations anyone?
Found this web site because it made it to the CBS news last week.It is called Prosper.I am thinking about being a loaner for them.Looks really good I feel for banks when this really takes off the web site has been up a year.Check it out.People loan People money.And you make 1 payment to Prosper a month.
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If so, what would be good?
The company name, etc
Bad credit debt consolidation loans are of two types:
1. Secured bad credit debt consolidation loans:
These types of bad credit debt consolidation loans are secured by a collateral usually some property or a guarantor. Since, the lenders find something to bank upon in case you default on payments, the interest rates on secured bad credit debt consolidation loans are cheaper, the lending amounts are higher and the repayment period can be long.
2. Unsecured bad credit debt consolidation loans:
Persons who do not have anything to offer as the collateral or security, can take unsecured bad credit debt consolidation loans. The lenders find themselves at increasing level of risk while giving such loans. The existing bad credit situation and lack of a collateral, make them charge high interest rates and offer low loan amounts to offset the risk involved. But, a person who has a bad credit and cannot provide a collateral has little choice, but to take these high interest loans. At least by repaying these the borrower can rebuild his credit history.
Deciding which bad credit debt consolidation loan is right for you can be a daunting task. Many companies offer free debt consolidation help to those who are cash strapped. Read more from: http://www.credit-card-gallery.com/credit_card_debt_consolidation_loan.html
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I have 6 credit cards. Three have zero balance. I transferred $9,000 to one credit card that has a fixed 3.99% interest rate for the duration of the $9,000. Another has $3,200 at 10.99%. The 3rd has $2,000 at 18.99%. I make a good salary, am never late with payments and always pay more than the minimum. I was talking to the bank manager about an unrelated matter and when he saw the credit balances, he suggested that I consolidate the debt and close 4 of the credit card accounts. He’ll give me prime + 1% which actually works out to be .5% higher than the two high debt credit cards together. He said that my credit rating (which is excellent) would be better as I would not have all that credit available for potential use. The only advantage I see to consolidating is that I’ll have only one payment. I don’t mind losing all the credit cards, but I would like to keep the 10.99% card in case of emergencies. Comments? Suggestions? Thanks.
You are a perfect candiate, I would go for it if I were you.
You sound like you have a bit of trouble realizing how credit cards work, so this is perfect for you.
This is how cards work. You charge stuff during the month - then you pay it off in full at the end of the month.
This builds up your credit. Carrying balances destroys your credit worthiness.
Keep in mind that only a small percentage of the population carry balances and make banks rich.
Next card you get, get one with cash back. Pay it in full each month.
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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!
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.
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www.creditcarddebtdebtconsolidation.com for complete information