So all totaled up over 4 credit cards I have about $9000 worth of debt. I am lucky enough to have never missed or been late on a payment, but my balance is quickly hitting its limit as the interest kicks in and I am in danger of over drafting on 3 out of the 4 in the next few months. I simply do not have enough income to do anything more than pay the minimum payment every month, so in theory the balance will never go down. I've heard all kinds of negative things about debt consolidation loans but honestly do I have any other options at this point? Would it be as simple as walking into my bank and attempting to get a loan for say $9000 to pay them all off? Seems like there's more to it than that. Looking forward to hearing from someone who knows more about this stuff. My income is about $45,000 if that helps, thanks. . .
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debt consolidation loan
Hi serenarova,
The only drawback of debt consolidation is unsecured debt consolidation loans generally require more time to pay off the debts. Thus, in the long term, you end up paying more.
However, if you are finding it impossible to make the minimum payments, then you can try to consolidate your debts. If you want you can also join a debt consolidation program. In the program, the consolidation company will do all the negotiations on your behalf. Thus, you will be free of any harassing calls.
In debt consolidation, you need to take out a loan in order to pay off your debts. In place of making many payments for the cards, in debt consolidation you need to make a single monthly payment. This payment is then forwarded to all your creditors by the consolidation company.
Yes, debt consolidation may not look good on your report. However, opting for this is much better than not paying the debts and hurting your score.
Thanks,
Aaron