Is Debt Consolidation Worth it?
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Debt Consolidation is only worth it if and only if you can get the lowest interest on it, and you have the means to pay at least the interest and bit of the principal on it. Do not get a debt consolidation if the institution asked for collateral (your house or lean against any of your asset-or equity). The reason is because credit card debt is unsecured debt, whereas when you put your asset to get a loan, you are putting your asset at risk. When you missed a payment or two, the institution has the right to call the loan and hence because you put your asset as a collateral, the asset can be auction/sold at the request of the institution. Read the fine print on the debt consolidation. Make sure the interest rate is the lowest through out the entire loan, some fine print will said 5% interest for the first 6 months and thereafter 17%. ( you are worst off!). Do your due diligent.
You will only save the interest payment on debt consolidation which is helpful in a way as you will pay the interest payment against the principal had you not consolidate your debt.
Bottomline, budget and watch your spending.
As long as you pay them all off in a timely manner with NO delinquencies, then it doesn't much matter. Infact, it helps to have MORE THAN ONE loan. However, too many can negatively affect your score. If I were you, I would not consolidate. I would do a balance transfer to a NEW card, and close a few others out with that.
The only way that debt consolidation works is if you are willing to change your spending habits. Its very hard to give up things, but look at the long term result of being out of debt vs all the stress of juggling payments that never stretch as far as they need to. I wish you great success in your efforts.
well your credit depends on a few factors
1)how fast you pay your debt(length in time for you to pay your debt days/weeks/months/years )
2)are you paying your debts on time (minimum payment, or full amount) always pay double the amount of minimum to cover interest charges
in my opnion n froim personal expereince best thing is to start zeroeing 2 of your small cards and the faster you do it the better it looks on your credit that you paid the debt fast it will help you get a higher limit on your other cards.
as for the large debt MAKE SURE IT DOES NOT GO OVER LIMIT OR MAXED
example Creditcard limit=1000 ,min=50 ,balance=950
make sure your balance is at 875-920 pay100 for minimum to cover interest and the faster you pay it the better
if you can do a home debt consolidation loan. that way you can pay them off and you mortgage will still be tax deductible.
Debt consolidation is a waste of money and time. You're just paying someone to make your monthly payments for you. That being said, the best way to boost your credit score is to pay down the debt rather than transferring it from one card to another.
I would say consolodate to 1 card. Cut up the remaining 2 cards so that you don't repeat this cycle all over again. You should be concentrating on paying more on the prinicipal of these cards. If you're paying montly minimum the $10-15 you'll never get out of debt and the ccard company gets richer with the interest $$$ it collects on your account!
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