J

anyone here every do a debt consolidation, I have been thinking of it lately.
sounds good, group all your bills together for one payment every month, a lower payment that is.
just wanting to know if it is a good thing or have some here had bad experiences with this?

Cynikal.Mindset

I might be needing this soon...student loans, credit cards...goddamn!

J

same here there calling about the student loans i never haven't paid yet, the one loan that come from the government(the other comes from the province) said that they are gonna take me income tax refund as payment until its paid off, so thats cool with me, income tax is just found money to me.

Cynikal.Mindset

do you know if debt consoloidation tarnishes your credit?

DoubaD

debt consolidation is just paying more for convenience sake, you'll just pay more interest

cosmic zx2

since when?
mind you... i'm no expert... it's not like i work at a bank or anything

Cynikal.Mindset

true...maybe I should just get a job! lol...soon enough soon enough, I still make my min payments for now, no harassing calls yet...next month I'll be employed and all good!

styls255

I have done it, it works out nicely

cosmic zx2

oh wait a sec.... i do work at a bank

consolidating all your debts gives you one payment at a lower rate and gives you a schedule so that in a few years you'll be debt free

Cynikal.Mindset

okay so then does it tarnish your credit record then? cuz I'd like to have 1 payment rather than 3 or 4...and the debt free part sounds good to me too

cosmic zx2

not at all.... the only time it gets tarnished is when you don't pay

Cynikal.Mindset

excellent, is this done through banks or private financial institutions like those ones on commercials and are there benefits or drawbacks to this?

this is really beginning to become very appealing to me

cosmic zx2

banks.... but they want you to have a job.... or if you're a student... a co signer

DoubaD

i guess it depends on what the interest is on what your bills are

my sister who works at a bank recomended that i avoid it, as well as my mom who's a book keeper

cosmic zx2

well Darryl...think about this.... average interest rate on credit cards is anywhere from 9.5-29.9%
average rate on a student credit line, or a variable rate loan is Prime plus 1%-4%
prime is at 4%... so you're looking at a total interest rate of 5%-8% annualy..... much better than any credit card interest rate

imported_WyKd1

its a GOOD thing... good for your credit rating too!!!
go to your bank & get a Line of Credit at Prime Rate or better... I think its 4.5% right now & pay off all your debt & just pay into the line of credit... much cheaper!!

imported_WyKd1

oh... one more thing... don't consolidate all your debt into a credit card company... BAD idea... best to go through your bank... talk to a personal banker there...

J

yeah this does sound good especially fo rmy situation, just wondering one thing though, would i be able to include my car loan in this, i mean everything else i have the option of paying in one lump sum, but on the car loan i have to follow the payment plan, issoemthing a bank could work out for me, or am i screwed on this one?

imported_WyKd1

what interest rate do you have on your car loan?
u may have to pay a penalty to move your car loan... but talk it over with your bank & see what they say... if the penalty for example is $200-$300 & current interest payments are say 9% you get a loan at prime rate of 4.5% over 5yrs lets say, so thats a savings of 4.5% over the term of your current loan... u do the math... is it worth it? i dunno... all up to u....

QuiCK_TiME

definatly depends on ur interest rates, but for the most part its alot better than having to pay several minimums, cos in that case the debt jus keeps growing- WHEREAS with debt consolidation you'll have that one minimum payment which will be set up to meet what YOU can afford.
my mom jus did it this weekend, they took her credit cards, and she pays bi-monthly.