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Mark Cappel
UpdatedMay 20, 2024

Is there a loan I can get to minimize the interest rates without hurting my credit?

I have a small trucking company and have acquired $60,000 in credit card debt. My truck and trailer will be paid off in 2011. I do own a home. Is there a loan I can get now to minimize the interest rates without hurting my credit?

First off, I would like to point out that, given the many factors that need to be taken into consideration when making a decision that will affect both one's business and personal finances, it is highly recommended you consult with a qualified attorney and/or financial planner.

With that said, the following is some general information regarding loans, interest rates, and credit that I hope answers your question.

There are loans known as debt consolidation loans that may give you the solution you desire. With it a consumer takes a single loan, usually secured by his home or other property, to pay off several other creditors. Debt consolidation loans are designed to lower the overall interest rate on debts, and to allow the consumer to make a single monthly payment to one creditor instead of paying multiple creditors. Debt consolidation loans do not generally have a negative impact on consumers' credit scores, as these loans do not increase in the amount of debt; they simply move it from one account to another. Also, consumers can leave open a few of their older accounts to make sure that they still have plenty of positive payment history appearing on their reports. It is important to carefully examine the terms of the new loan and to do the necessary math to determine if it will truly deliver the results you're looking for over the lifetime of the loan.

Keep in mind that by using your house to secure a loan, it may now become vulnerable to foreclosure should you find yourself unable to repay the loan.

The interest rates of loans are significantly affected by your credit score, so have a current credit report handy and research its implications. (By law, you're entitled to one free credit report annually from the credit bureaus. This can be accessed at AnnualCreditReport.)It is also a good idea to have the patience to shop around, as you will find that there is a wide array of lenders with vastly different offers.

I encourage you to visit Bills.com to learn more about debt consolidation loans. The site also offers a link to a free online application where you may apply to be matched to one of our pre-approved debt consolidation loan providers. Simply use the savings center tool on the site.

I wish you the best of luck with your business and your loan search, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com

Struggling with debt?

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.

According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in West Virginia, 37% have any kind of debt in collections and the median debt in collections is $1459. Medical debt is common and 24% have that in collections. The median medical debt in collections is $553.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.

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