No. of Recommendations: 3
The biggest thing to watch out for with a loan vs line of credit is that the payments are more fixed. It's great that you are paying more money on the credit cards then you need to. But it might be wise to make sure that any loan that you take out has more of a "cushion" in terms of total monthly payments. With your credit cards, if a tight month came up, you could reduce your total payments for the month. With a fixed loan you don't have that same luxury.

If you end up decided that you would like to consolidate but have trouble qualifying with a traditional bank, you could consider somewhere like Prosper. I had consolidated credit card debt with them about 7 years ago. And actually the consolidation actually improved my credit score to a point where I could get an even better rate from somewhere else only 2-3 months later. That obviously isn't something you should plan on happening yourself, but it was a nice side effect for me.

But whatever you decide the most important thing is to not add more debt. Most people who take out consolidation loans tend to increase their credit card again soon after.
Print the post  

Announcements

UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement