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Author: ArgentLupe One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 310474  
Subject: Re: Consolidating credit debt Date: 11/4/2003 9:24 AM
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I think the first question should be, "Have you changed your spending habits?"

All too often, people will "consolidate", which frees up their cards, and back up it goes. Also, what will the interest rate be on the consolidation? How are you getting this loan? Is it a "signature" loan, or are you taking the loan against some asset, such as your house. Many loan sharks will say "consolidation loan" when what they mean is 2nd mortgage. It is generally considered ill-advised to change unsecured debt to secured debt.

You (both the reply and the OP) don't have to answer these questions on the boards, but please do consider them.

Also, to the OP, you said that you would still have $5,000 remaining of debt. You need to be sure that you're not leaving high-rate debt out there. ie: if $2,500 of the "to-be-consolidated" debt is at at 9%, and the $5,000 is at 15%, please consider it may be more advantageous to include $2,500 of the 15% debt in the consolidation. I don't know if this is going to make sense to you, but it's just something to consider.

To both posters, something further is the ammount of monthly payments. Normally, consolidation loans would reduce your monthly debt-service costs. However, if you are looking at sub-prime lenders, this may actually increase the monthly ammount you pay out to service your debt. This could put you in a further crunch. Just something to be aware of...

Hopefully some of this helped, but I'm sure the rest of the board will chime in Real Soon Now. :)

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