Credit Consolidation Loans

READER QUESTION

My question is who can i get a credit consolidation loan from that i don't have to pay back?

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Bills.com Resident Expert
Dec 12, 2011
BILL'S ANSWER

There are several different type of consolidation loans, but the one that will best suit your situation depends primarily on whether or not you own a home and your credit history.

If you own a home, a secured debt consolidation loan may be right for you.

I can tell you that applying cannot hurt to see if you can save. Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the loan page and find a loan that meets your needs at:

/mortage/refinance/

This type of loan is essentially a home equity loan which is used to pay off your other creditors. Secured consolidation loans help many consumers by consolidating all of their debts into a single monthly payment with a lower interest rate and payment amount. However, be careful before you borrow money against your home to pay off credit cards and personal loans; you are converting what was previously unsecured debt into secured debt. This could cause you problems down the road if for some reason you are unable to make your payments, or if life circumstances force you to file bankruptcy, as you may not be able to discharge the secured debt as you would unsecured debt. However, secured debt consolidation loans work for many people, so this is an option to consider carefully - the Bills.com Savings Center is a great resource to help you find a lender for this type of loan.

If you do not own a home or other property to offer as collateral for a secured debt consolidation loan, there are several other options you should consider. You may be able to transfer your existing cards to another credit card with a lower APR, or one with a 0% introductory rate. A balance transfer could help you by consolidating all of your credit cards into a single account with a lower interest rate and lower monthly payment. You may want to explore:

Credit Card Offers

Search for credit cards that meet your needs. A card such as the Discover Platinum, with a 0% APR for 12 months, and 10.99% thereafter, is certainly a good deal as far as credit cards go. You could also look into an unsecured personal loan to consolidate your debts–check out the loans section of the Bills.com Savings Center for unsecured debt consolidation loans that may improve your situation. However, since your credit history is less than perfect, you may have difficulty finding a lender willing to extend you credit, and if you do find a loan, you should expect to pay a premium in interest. In fact, a conventional unsecured debt consolidation loan, such as those I mention above, may be impractical and cost-prohibitive due to your credit problems.

A possible alternative loan resource you may want to explore is www.Prosper.com a site which puts private lenders in contact with private borrowers. A private lender may be more willing extend you a loan than a traditional bank. If you are unable to find a consolidation loan that fits your needs, you may want to look into alternatives such as debt settlement or credit counseling. Bills.com offers a wealth of information regarding the various debt help options available to consumers - visit /debthelp/ for more information. I hope we can help you find a solution to your debt troubles, and help you Find. Learn. Save.

Best of luck,

Bill

www.bills.com

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