Loans for consolidating credit cards
Debt consolidation makes sense for people who want to make one payment each month instead of several, and for those who can lower the amount of interest they pay by taking the new loan.You can figure out how long it will take to pay off your debt using a debt payoff calculator like this one from CNN Money.Debt consolidation companies like National Debt Relief and Freedom Debt Relief offer to help you through the process for a fee (eating into your savings).They will instruct you to stop paying your bills, which leaves you open to lawsuits by your creditors.At that point, the delinquency stops affecting your credit. Your credit suffers tremendously in the meantime, and since you’re still legally obligated to pay the debt, a debt collector can pursue you until the statute of limitations runs out in the state where you live.Which strategy will ultimately be the best choice for you depends on your own circumstances, and we can’t tell you what to do.
The plan is designed to get you out of debt in three to five years, after which all of your accounts should be reported as paid-as-agreed.But the option we want to discuss here is paying off debt.You may have heard that some creditors are willing to settle your debt for pennies on the dollar.One of the biggest pitfalls of debt consolidation is the risk of running up new debt before the consolidated debt is paid off.When you finish paying off credit cards with a consolidation loan, don’t be tempted to use the credit cards with their newly free credit limits. You may have heard that doing so could hurt your credit score, and it might.