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How about consolidation loans? - 4/15/2008 12:41:38 PM
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Beck34
Posts: 200
Joined: 3/24/2008
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I have been thinking about trying to get a consolidation loan so I can get my finances in order. Any advise? I have never done anything like this before, and I don't know anything about it. Please help me?
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What do you expect, It's Beck!
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RE: How about consolidation loans? - 4/15/2008 5:27:08 PM
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metoo
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I recommend against it. Statiscally the number of people who get consolidation loans and then a year later have run up the credit cards again is incredibly high. Instead this is what I would suggest.
1. Although it may seem obvious, stop creating new debt. Don't use credit cards, pay-day loans, get a car loan. Nothing! NO NEW DEBT!
2. Make a list of all your debt. Include the balance, interest rate, monthly payment and how many payments are left.
3. Pay off the smallest debt first. If you have any extra money, apply it to the smallest balance. When this debt is paid, add the amount you were paying on this debt to the next smallest debt and keep doing this. If your minimum monthly payments go down, add that amount to the smallest bill. In other words, you will always be paying the same amount each month, even as debt is paid off.
Some people will say pay the highest interest rate debt first. After time, you may want to consider this to some extent. But first, eliminate a few debts. It will help you press on toward your goal of being debt-free.
After doing this for a year, if you have not added any new debt, you may want to consider a consolidation loan if it will save you a lot in interest. Keep paying the same amount that you have been paying so you get out of debt as soon as possible. When ever you get any extra money (gifts, overtime, tax refunds) ALWAYS apply it to the debt payments. Don't go "reward" yourself.
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RE: How about consolidation loans? - 4/15/2008 7:39:23 PM
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DeltaPine
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"You can't borrow your way out of debt"
metoo gave great advice.
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RE: How about consolidation loans? - 4/15/2008 11:53:11 PM
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Beck34
Posts: 200
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I haven't thought of it like that. I was just rying to find a solution, and that seemed like an easy one. I have cut my spending way down, and others have helped me on a day to day level. Thanks for the advise.
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What do you expect, It's Beck!
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RE: How about consolidation loans? - 4/16/2008 1:35:03 AM
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U376977
Posts: 45
Joined: 2/24/2008
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Where do you plan to get the loan? The credit market is to tight right now that unless you have a very good score you won't be able to get a loan. I am guessing that since you are considering getting a consolidation loan that you are having trouble making the payments? ???
Also, what kind of debt do you want to consolidate? If it is student loans and you can consolidate you would probably get a lower rate. That credit could be easy to get now because it is still govt. underwritten. And if your debt it is credit cards with high rates it would be good to consolidate into lower rates if your credit will qualify. Keep in mind that you will have to resist the temptation to aquire new debt.
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RE: How about consolidation loans? - 4/16/2008 10:04:17 AM
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Beck34
Posts: 200
Joined: 3/24/2008
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I've thought this over, and I feel that God will help me to manage without it. Besides that, my husband thinks that I need to resolve this without getting in any deeper. I haven't been able to find a company that seems reputable to allow me to do this, and I certainly don't think I need to go on-line to look. Payday loans are what got me into this mess in the first place so I know that organization and cutting spending are the only way that I can get out of this. I know God will help to guide me through this time. I just have to trust Him to guide me, and not to try to do it on my own.[image]
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What do you expect, It's Beck!
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RE: How about consolidation loans? - 4/24/2008 9:30:39 PM
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tbrobinson
Posts: 257
Joined: 5/11/2005
From: MIAMI Florida
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Good thinking. Take a look at Crown.org, and also Dave Ramseys site and show. Very strong advice there.
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RE: How about consolidation loans? - 4/24/2008 10:34:33 PM
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creationtalk
Posts: 586
Joined: 6/9/2005
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You have gotten good advice.
Consolidation loans do NOT help you get your finances in order. You get your finances in order (with the help of budget counselor, financial counselor, or whatever if needed), THEN you decide if you want/need a consolidation loan.
ditto the recommendation that you check out the resources at Crown. I don't know much about Dave Ramsey, so cannot say about him.
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RE: How about consolidation loans? - 4/25/2008 11:07:57 AM
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Beck34
Posts: 200
Joined: 3/24/2008
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I am getting on the right track without the consolidation loans, and I am going to pay my debt off a little bit at a time. The resources given to me have been very helpful.
_____________________________
What do you expect, It's Beck!
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