Should I consolidate my credit cards into one loan?
Answers:
It would depend on the balances and the interest rates. If the majority of the balances are on cards that charge higher interest and you could refinance at a lower rate, then yes you would save money.
You can always apply for the loan and if your approved, then just sit down and do the math.
you would be better off to pay cash for everytinng, buy it as you can afford it. you will never get ahead with that crdeit card debt
you'd save more money if you take out as much credit as you can - then do a 'runner' to South America.
I think it makes sense when you have a 0% apr. its easy to track .
What you really need to do more is stop charging things. Pay as much down as possible - starting with the credit cards that have the highest interest rate. Learn to pay more with cash.
If you can, consolidate all your debt into one loan of a lower interest rate and pay it off as soon as you can. Most importantly, cut up all your cards. Reality check: calculate how much interest you are paying on the credit card debt each month. It's O.K., I know you won't do it.
I would say NO. But I do not have all the peices of your puzzle, so i can not say no either. However, this the best way to resolve your issue is to take this into consideration.
A loan consolidation agency doesnt make sense when you use math. SO DO NOT USE CONSOLIDATION AGENCIES. Here is my proof.
They are there to make their money. So they will not consolidate it and give you a lower APR, if they do, they will not make any $ from you. Or, they might charge you a lum sum in advance which will exceed the interest you are paying currently on your cards.
What you want to do is
1. get an exta job on the side.(with another job for a short period of time, you will not be able to go out and spend more money, and your even end up with saving some cash, unless you pa off your debt asap, which is just like saving when your avoiding those interest charges)
2. start paying off the cards with highest apr , and make min payment on the cards with lowest interest rates.
3. Once you pay off the one with 12%, move to the next highest interest credit card. AND SO ON...
4. HAVING 7 CREDIT CARDS IS NOT GOOD, IT TELLS THE BANKS THAT U R NOT MUCH OF A STABLE PERSON AND THAT YOU CAN USE THE CARDS AND NOT PAY THEM, AND U STILL MIGHT HAVE ONE OR TWO THAT ARE IN GOOD ACCOUNT THEREFORE YOU WONT REALLY HAVE TO PAY THEM.
5. EVERY 6 MONTHS TO A YEAR ask for a limit increase on your credit cards with lowest interest rates.
6. USE ONLY UP TO 30% OF YOUR CREDIT LIMIT. If a card has a limit of 10k, use up to 3k only.
7. Once you have established enough seasoning on your credit cards, cancel the old ones with highest apr.(DO NOT CANCEL A CARD THAT YOU HAVE had it FOR A VERY LONG TIME, JUST DNT USE IT IF ITS APR IS HIGH)
Good luck to you.
It sounds like you have been financially responsible in paying your credit cards so you should be able to consolidate and refinance them without much trouble.
You would most likely save money by taking out a consolidation loan but you might have higher monthly payments.
If you get a personal loan for $25,000 over 3 years at 10%, your monthly payment would be around $791 and you will be out of debt in 3 years.
While the loan's monthly payment may be higher than the total of the minimum payments you are paying on your credit cards, it will take you up to 50 years to pay back the same $25,000 balance (assuming an average 10% rate and 2% minimum payment). Over that time, you would have paid way more interest... to the tune of $40,000+.
I recommend:
1) Figure out how much you are willing to pay down on your credit card debt each month as a total.
2) Take out a consolidation loan with the monthly payment amount of that amount (say a 3-year $15,000 loan at 10% has a $500 a month payment). Refinance part of your credit card debt, starting with the highest rates.
3) When you paid the loan off in 3 years, you can consolidate again with the remaining credit card debts.
do u have $3500 on each of them? thats a lot of money you owe and you are definitely paying lot of interest if u are just paying minimum or little more than minimum.
Consolidating credit cards wont help you much becoz u will still be paying interest on them and you will loose the urge to pay the money fast. But it will help you if u are in real financial trouble.
It is good u decide before it grows out of proportion.
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