Credit Card Debt Consolidation Loan - The Bills.com Blog
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Credit Card Debt Consolidation Loan
Question: Hi, my fiancé and I recently purchased our first home, but it needed more repairs than we anticipated. Now we are stuck with about 20,000 in credit card debt. What the disadvantages of having a credit card debt consolidation loan? Or do you have any other suggestions?
Answer: Thank you for visiting Bills.com. Here is an answer to your question.
Bill consolidation can benefit youin many ways: i) monthly cash flow, ii) total savings, iii) interest deductibility, and iv) your credit rating.
However, all forms of credit card debt consolidation are not the same. You need to consider your specific situation, including if you own or rent your home, your monthly debt to income ratio, and your credit rating. A program like a debt consolidation loan may lower your monthly payment,
get you a lower rate than most credit cards, and the interest is tax deductible. The biggest downside of a debt consolidation loan is that it shifts unsecured debt to secured debt, and you would never want to risk missing a payment or over-extending yourself on your mortgage to risk foreclosure.
Alternatively, a program like negotiated debt settlement may lower your monthly payment, get you
debt free fast, save half of what you owe, but it could negatively impact your credit rating.
These are a few of the considerations. If you would like more information, please visit our debt consolidation resource page.
I hope this information helps you Find. Learn. Save.
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Laura on Wednesday 21st November 2007 03:42
I agree that there are several forms of credit card debt consolidation. Of course it's better to avoid debt buy using credit cards wisely. However, if people don't manage to do it, they should choose the appropriate form of debt consolidation.