Debt consolidation? what is it..?
Question:
Answer:
If I was the lender, I wouldn't even bother consolidating your debt. You have maybe $1000 of debt from credit cards and maybe less than $20,000 of debt on you car loan. Plus, you already defaulted on your car loan. So you are already deemed high risk to any lender. Depending on your income, your debt-to-income ratio maybe very high.
When you consolidate debt, the bank will look at your credit history and find out how much debt you really owe. Then they will work with you to figure out which debt you want to combine into one monthly payment. That is what debt consolidation is all about. Combining all or some of your debt into one low monthly payment. While your monthly payment is lower, you should really use the saved money to your advantage by applying it some to the principal payment and investing the rest.
I don't know how you can't afford to pay your car payment. If both of you are working, you should be able to pay the car each month. If not, then you seriously need to evaluate your finance and better manage it. You need to find out where you can cut your expenses down and find a way to free up money. You can achieve this by doing a budget worksheet.
Do you own your home or are you renting?? Need to know that before I can answer your question.
ok if you rent then you options are going to be limited, by that I mean you will either need to get another credit card with a balance transfer offer that is lower than the interest rates you have on your credit cards to pay off the credit cards then DONT use them if possible.
Or you could apply for a personal loan from your bank. Use the loan to pay off the cards and get caught up with your car payments.
Keep this in mind though, you have to be strong willed, because what most people do is take out a loan or use a balance transfer offer from another credit card then start to use the credit cards again then they have the loan AND more credit cards to pay-off. Just please be carefull I have seen it way too many times.
any other questions just add details and I will try and check back with you.
Debt consolidation is ...getting a loan to pay off all your debts, and then you have only one debt to pay off... the loan.
If you are talking about a credit service that takes your cards and then you make one payment. Stay away, that goes on your credit report. Then it is almost as bad as a bankruptcy. Also, many credit applications are now asking if you have used a credit service to consolidate your debt. Call your cards directly and explain and see what they suggest. They will want to work with you.
Credit card debts must be cleared at the earliest as very high interest rate and penalties continue to increase the debt mountain, inviting financial crises in the coming days. The best and popular to get rid of credit card debts is to opt for credit card debt consolidation.
Under credit card debt consolidation, the debt ridden person has the option of taking a loan. Through credit card debt consolidation loan the borrower can pay off all credit card debts at once and he gets rid of the debts. However the debts are now in fact consolidated or merged under the new lender providing credit card debt consolidation loan. The loan implies also that instead of paying debts installments to many credit card companies, the borrower now pays monthly installments to one lender. read more about it at: http://www.credit-card-gallery.com/artic...
You have no real debt compared to most of us...just get a second job and pay the rent. Debt consolidation isn't right for you. A budget is...cut down on the electricity bill, get rid of cable and see about the cell phone. I wish I was only in debt that much...you got it made darlin.
More Related Questions & Answers...