Debt Consalidation...

[DMickey28]

I need to do this. Anyone have any expierence with this? which companies are good? how does it work? what is the best way to do it? I don't have a ton, probally under $10K not including school loans.... but i need to do something.

Thanks guys....I knew I could count on you!

 

[WDWHound]

Be very careful. Certain forms of debt consolidation loans can damage your credit rating according to an excellent artical on the subject:

"Debt consolidation loans can hurt your credit. The actions usually associated with such loans -- applying for a new credit line and closing old accounts -- can damage your FICO credit score, said Craig Watts, spokesman for Fair, Isaac & Co., the company that developed this leading credit score. The loan’s benefits might outweigh the drop in points, but most people can find a better way out of debt that doesn’t hurt their credit rating"

My step father is a realtor and he is encountering a lot of people with damaged credit ratings becuase they have these kind of loans.

Here is a link to the article I qouted:
http://moneycentral.msn.com/content/Banking/Betterbanking/P37889.asp

 

[mtemm]

We got into some debt years ago and found the best way to do it was to call the credit card companies and ask for a lower rate. Most dropped it immediately, a couple did not (my dh had several cards before I met him). The ones that dropped it were awesome and we ended up transferring the balances from the higher rate cards to the lower rate ones. I think we ended up with 2 cards not including amex. The 2 cards had high balances, but we saved money automatically by the drop in interest, and it was just easier to concentrate on paying them off.

We ended up going a step further eventually and confessed our problem to my dad. we worked out a deal with him where he cut us a check to pay them off, and we paid him back over so many years at an even better rate. He did charge us interest, and I'm glad he did, but it was less than the credit cards, and he made some money out of the deal. I should say is making some money, we're still paying him back.

Its a tough lesson to learn, but being out of debt feels so much better than anything I ever bought on a credit card. Can't wait until its completely gone!

 

[Pebblszzz]

Instead of a loan, I went to www.genus.org. Saved me a trip to the local chapter of the Consumer Credit Counseling Service (I'm lazy if I can get away with it!)

THEY contacted all my creditors, negotiated lower interest rates, and even some agreed to accept less than $1:$1 ratios (in other words, one credit card company agreed to accept $.60 on the dollar). Saved me a TON in monthly payments!

I went from payments of $1400+/month to around $800/month.

That was 4.5 years ago, and now it's all paid off. Yay, me!

They don't charge a dime for the service, as it is a non-profit organization, however - they do ask for a donation - and recommended $1/month per creditor (which amounts to just a few bucks a month, depending on how many you have).

Check it out.

Good luck!

 

[aprilgail2]

I had used Debt Free America www.debtfreeamerica.com in the past and they were great...I have everything I owed paid off after just 3 1/2 years with them. I paid over the amount they wanted to get it paid off a bit sooner but even while I was doing that I still got a car loan on my own with a decent interest rate and a low interest credit card that I keep in my wallet for an emergancy but have used only once since I got it!