Comments on: Is A Debt Consolidation Loan A Bad Idea?

By: Danielle

Danielle — Mon, 01 Jun 2009 23:33:27 +0000

I might be a bit late to the party, commenting now that it is June, but I have a strong opinion about this.

I agree with your ideas that a consolidation loan will not do you any good if you don’t fix the underlying problems, however I don’t agree that a consolidation loan, peer to peer or borrowing from family should be considered before balance transfers to another card.

If you have good enough credit for any of those other options, you should also be eligible for balance transfer rates. Even in todays “credit crunch” I get offers for 0% for 7 months, 2.9% for 12 months. How can these tools be overlooked as options. The way credit cards apply your payments to the highest rates first there is a strong discouragement to using the card.

By: 50 Bad Money Habits That Will Leave You Eating ALPO For Dinner | My Super-Charged Life

Wed, 20 May 2009 13:18:49 +0000

[...] want to consolidate their debt when they have too much to afford the monthly payments. Debt consolidation usually offers a lower monthly payment, but without a change in behavior most folks wind up deeper [...]

By: Jeff@MySuperChargedLife

Jeff@MySuperChargedLife — Mon, 18 May 2009 16:55:51 +0000

Ron – Back a few years ago, I took out a home equity loan to consolidate several debts into one loan. I did it for all the wrong reasons (i.e. lower interest rate, lower monthly payment, etc.) Fortunately, shortly afterwards, I read Total Money Makeover by Dave Ramsey. This saved me from digging myself a deeper hole. Today, we are debt-free except our mortgage. It took my wife and I almost two years to pay off our consolidation loan. I was sure glad to see that sucker die!

By: » Debt Consolidation Loan | The Wisdom Journal

» Debt Consolidation Loan | The Wisdom Journal — Mon, 18 May 2009 11:22:00 +0000

[...] More: Debt Consolidation Loan | The Wisdom Journal [...]

By: Michael Harr @ Wealth...Uncomplicated

Michael Harr @ Wealth...Uncomplicated — Mon, 18 May 2009 06:22:16 +0000

Solid post. I’d add that if someone does pursue a debt consolidation loan, they should take it two steps further. First, close all associated credit accounts that created the ‘need’ for a consolidation loan. Second, freeze your credit to make it more difficult to acquire credit (this doesn’t ding you necessarily, but it can help to reduce your likelihood of falling back into bad habits). By freezing your credit, you also reduce solicitations arriving via postal service.

Generally speaking, most are better off not consolidating because the psychology of consolidation puts them in worse shape than simply digging in and paying things off one bill at a time. With the current environment, creditors are more willing than ever to deliver favorable payment arrangements with account holders–particularly those with heavy debt loads.