A Look at personal loans in personal loans?
personal loans:
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Question by diva22: personal loans?
I have a lot of debt from credit cards and personal loans. I would like to get a loan to pay off everything so that I will only have one payment. My credit is messed up because of all of the accounts that I have open. Any suggestions of what I should do?
Best answer:
Answer by sunsetsrbest1
The 2 most practical solutions are:
~ refinance and use the equity in your home for debt consolidation
~ if not possible, then use one of the many companies available to help you cosolidate and settle the debts
Be careful with debt counseling services- so are reputable and some are scams. Be cautious and check references and clients
Know better? Leave your own answer in the comments!
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Your credit is not messed up from all the accounts you have open, it’s messed up because you are not paying the ones you have before taking another loan and another loan, etc. What good will one consolidation loan do for you because you will still have one payment (creditor) to not pay? Whether you owe $ 10,000 or five $ 2,000 loans you still owe $ 10,000.
My first word of advice is to stop charging and taking out loans. It’s not easy but it’s the only way out of debt. Stop the minimum payment only cycle even if that means giving up something you are buying that your really don’t need. Don’t tell me that all of your debt is from practical needs and not wants. If you have a cell phone, that’s $ 30-40 a month that would surely be a double payment on a credit card. If a cell phone is a need, what did we all do 10 years ago? This analogy is true for cable tv, high speed internet, gas guzzling car, etc. I am not saying to give up everything and become Amish. What I am saying is judgement is what got you in trouble in the first place.
The two ways out of debt are to increase income or reduce expenses. It’s not easy but neither is taking on and paying off yet another debt. You don’t have to cancel your credit cards but don’t use them. You want to keep your credit history going. The only cards to cancel are the ones with annual fees. The time will come when you are out of debt completely… don’t keep those $ 30-50 a year annual fee cards. Get them paid off asap.
You can increase income with a part time job or business of your own. You can consider a roommate to help with rent and utilities. You can look into selling things you no longer want or need… even half of the value of something sitting in your closet will help with your total debt.
You can decrease expenses by getting rid of unneccessary expenses, downsizing your lifestyle, paying off debt one by one, clipping coupons for products you use, and lots of things to do to save $ 1 here and $ 3 there… it adds up. But, don’t just save the money… put that amount onto a bill and before too long, that bill be paid off and you tackle the next bill and the next.
Refinancing sounds like a good idea but if you cannot pay the bills you currently have you cannot pay the refinanced loan either.
Make a committment to yourself TODAY to devise a plan and stick to it.
If you have nothing for collateral than you are looking at pretty high interest. Call the institutions- and set up a settlement agreement- you may be surprised how willing they are to work with you- especially if you tell them you are thinking of filing a bankruptcy- which would mean they may not get repayment from you at all-and that you would like to close the account. If there are too many accounts and don’t feel confident contacting them to negotiate, there are organizations that can contact your creditors on your behalf- (Consumer Credit Counseling) but including your accounts in this type of status does effect your overall credit rating- but they will help you get rid of some of the interest and focus on actually getting the stuff paid off….but it would automatically bring your credit rating to a C or C- rating- so depending on if you are already behind on the payments or not would greatly affect your decision to contact credit counseling ..
You can close all of the revolving credit accounts that are open- and still pay on them- just the fact that they are closed should help your credit rating significantly- especially revolving accounts- which means they are not scheduled to be paid off by any certain date- you can keep running it up and never pay it off- so close them!!
Being over your spending limits significantly reduce your credit score- even if it is over the limit by five dollars!! So if you are over your limits than pay them down….
Personally, quit living beyond your means.