Is consolidating debt good

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However, if you transfer the balances of those three cards into one consolidated loan at a more reasonable 12% interest rate and you continue to repay the loan with the same 0 a month, you'll pay roughly one-third of the interest (

However, if you transfer the balances of those three cards into one consolidated loan at a more reasonable 12% interest rate and you continue to repay the loan with the same $750 a month, you'll pay roughly one-third of the interest ($1,820.22), and you will be able to retire your loan five months earlier.This amounts to a total savings of $7,371.51 ($3,750 for payments and $3,621.51 in interest).Of course, borrowers must have the income and credit worthiness necessary to qualify with a new lender, which can offer them at a lower rate.Although each lender will probably require different documentation depending on your credit history, the most commonly required pieces of information include a letter of employment, two months' worth of statements for each credit card or loan you wish to pay off, and letters from creditors or repayment agencies.

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However, if you transfer the balances of those three cards into one consolidated loan at a more reasonable 12% interest rate and you continue to repay the loan with the same $750 a month, you'll pay roughly one-third of the interest ($1,820.22), and you will be able to retire your loan five months earlier.

This amounts to a total savings of $7,371.51 ($3,750 for payments and $3,621.51 in interest).

Of course, borrowers must have the income and credit worthiness necessary to qualify with a new lender, which can offer them at a lower rate.

Although each lender will probably require different documentation depending on your credit history, the most commonly required pieces of information include a letter of employment, two months' worth of statements for each credit card or loan you wish to pay off, and letters from creditors or repayment agencies.

If you have a good payment history with a bank, credit union or credit card company, asking that institution about a debt consolidation loan should be your first step.

“If you can get your bank to approve a loan, that’s great," says Tim Gagnon, assistant academic specialist of accounting at the D'Amore Mc Kim School of Business at Northeastern University.

,820.22), and you will be able to retire your loan five months earlier.

This amounts to a total savings of ,371.51 (,750 for payments and ,621.51 in interest).

Of course, borrowers must have the income and credit worthiness necessary to qualify with a new lender, which can offer them at a lower rate.

Although each lender will probably require different documentation depending on your credit history, the most commonly required pieces of information include a letter of employment, two months' worth of statements for each credit card or loan you wish to pay off, and letters from creditors or repayment agencies.

If you have a good payment history with a bank, credit union or credit card company, asking that institution about a debt consolidation loan should be your first step.

“If you can get your bank to approve a loan, that’s great," says Tim Gagnon, assistant academic specialist of accounting at the D'Amore Mc Kim School of Business at Northeastern University.

is consolidating debt good-86is consolidating debt good-85

Once in place, a debt consolidation plan will stop the collection agencies from calling (assuming the loans they're calling about have been paid off). The Internal Revenue Service (IRS) does not allow you to deduct interest on any unsecured debt consolidation loans.

The monthly savings is 5.21, and over the life of the loan the amount of savings is ,765.04.

Even if the monthly payment stays the same, you can still come out ahead by streamlining your loans.

These loans usually are offered by financial institutions, such as banks and credit unions, but there also are specialized debt-consolidation service companies.

There are two broad types of debt consolidation loans: secured and unsecured.

If you need actual debt relief or don't qualify for loans, it may be best to look into a debt settlement rather than, or in conjunction with, a debt consolidation loan.

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