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 you in 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 (http://www.bills.com/debthelp/)

Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed.

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