Consolidation loans. Need some advice.

[Adul]

I don't have a clue what to look for. But I know I would rather have one monthly payment on some of my debts instead of the glut I have now. So what are good places for consolidation loans? What should I watch out for?

 

[Locutus of Board]

If you have a bunch of credit cards, try this.

 

[Adul]

only got three of them. But i got some other debts I want to put in with it.

 

[Wangel]

We did a home loan so that the interest could be deductable. See a tax attorney before proceeding because laws change and are different in each state.

 

[AndrewR]

Any ideas on education loan consolidation? (no home, renting) I need to consolidate mine at some point, but cannot afford the consolidation payment (in deferment now, and interest is killing me)

 

[Adul]

I don't own a home.

 

[jjm]

Some people play the game of rolling their balances to a low "initial" rate credit card every few months. But that can be time-consuming.

Your best bet is probably to go to one of your local banks. Assuming that your credit history is good, you should be able to get a personal loan at a rate cheaper than the rates on your credit cards. Unfortunately, these loans often require repayment in as little as five years.

If you work at a place with a credit union, you're in luck. Credit unions often have the best rates.

 

[kranky]

jjm's advice is good. [Commercial: anyone who is eligible to join a credit union, JOIN! You probably will only have to put in $5 to create an account, and you're in for life.]

There is some merit to the flipping balances around on low-rate credit cards, but the catch is that once banks see you have a significant CC balance (and it looks like right now, your debts are spread out so they aren't all CC debt), they may stop offering you new low-rate cards and raise the rate on the card you have. Kind of risky, but it might work. I'd have a backup plan just in case.

Can you use a paid-off vehicle as collateral for a secured loan? That would get you a rate equivalent to a used-car loan rate, which would be better than a personal loan rate. As jjm said, try a credit union first, then a small local bank. Do not go to "finance companies" like HFC and the like which charge very high interest rates.

A consolidation loan will typically get you a lower payment but will probably stretch out the debt over a longer time. That will be costly in the long run, so it might be worth it to see if you can pay down the debts with the highest interest rate first before taking a consolidation loan. Look at the numbers carefully before jumping in to one, because the appeal of the lower payment today might be long forgotten a few years later when you're still making payments. It might be better to suffer a little now in order to have those debts cleared sooner down the road.

Good luck with finding a solution that works best for you.