PostHeaderIcon isnt a debt consolidation loan different from filing bancruptcy?

i want to consolidate my credit card debt with the hopes of averaging out a lower apr. negative effects of consolidation loan on credit?

8 Responses to “isnt a debt consolidation loan different from filing bancruptcy?”

  • dWali says:

    Debt consolidation and bancriptcy is two totally different things.

    You can not CONSOLIDATE the debt from onne credit card, it is already consolidated.

    Debt consolidation is where you take many debts, and combine them all. You then just make ONE LARGER payment per month, rather than numerous little payments. iT ASSUMES many CREDITORS and not just one credit card debt.

  • SueinFL says:

    I do not believe there are negative effects of a consolidation loan, as it is simply another item on your credit report. If you pay it monthly, it acts like any other loan. A bankruptcy of course stays on there for 10 years and wipes out your debt and there is no way to get it off or recover from it, it is a permanent record. If you pay off other credit cards though, make sure to close the accounts because too much open credit – even with a 0 balance – can also hurt your credit score. In terms of which one looks worse on your credit report – the bankruptcy for sure. The plus side of bankruptcy is if you are really in debt, it gives you an opportunity to start over – but it takes awhile. You might also try some of the credit counseling firms that work with your creditors to get lower interest rates – that does not effect you as adversely as bankruptcy either – but you must give up your credit cards until they are paid off.

  • waggy_33 says:

    The biggest problem with a debt consolidation loan is that if you don’t solve the problem that caused the need for it to begin with you could very well be forestalling bankruptcy. Get rid of the credit cards, budget your expenses, live within your means.

  • gentleman says:

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  • Barbara R says:

    This loan shows future creditors that you haven’t been able to handle your money. Just like Credit Counselling, it hurts you. You will be “high risk” either way, so you have to decide which is the best way for you to go.

    Some advice: Work with your credit card company (ies), they can lower your interest rate easily, they did mine. They can also lower your payment to get your credit rating back to normal, too. Call them, they’ll work with you…nobody likes a bankruptcy, specially them. Good Luck!

  • sophieb says:

    sometimes people choose consolidation because they can’t afford to make 3 or 4 payments a month, they don’t want to get behind, and they don’t want their payments to be doubled just because they were late with their payment, and they’re able to get the condolidation loan for (hopefully) a lower interest. But in consolidating it means you would be tempted to use your credit cards again and get in over your head.

    Yes consolidation loan is different from bankruptcy, but if not handled correctly consolidation can quickly lead you to bankruptcy.

  • bettyswestbrook says:

    a consolidation loan can be a very good move for you. It can reduce the amount of money you pay out every month, however, if you get 1 make sure that you put your credit cards up and do not use them or you can end up owing the consolidation loan and a bunch more credit cards. good luck

  • allieleigh8 says:

    its time for plastic surgery! the best thing to do is to cut up your credit cards. a consolidation loan really won’t help you in the long run unless you modify your spending. sit down and create a budget based on your income. then list your debt from smallest to largest and all but the smallest make the min. payment. on the smallest you will want to budget in to make the largest payments you can. then when you pay that one off take that cards min. payment and add it to the min. payment of the next card and so on and so on. eventually you will pay them off and not go into debt again.

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