Debt consolidation loans

[Deleted]

We have an offer for a loan through discover to transfer our cc balance to a loan where we can have a much lower interest rate. Sounds great, but what are the risks? Sister mentioned that it might be worse than bankruptcy on our history. We are totally not that desperate.

Cc debt is about $12k at 19%. Spending is under control, this is from some stuff we went through that we are now out of andv recovering from.

[megstoo]

I actually wouldn't do a consolidation loan for that amount of debt. I hate to admit this but DH and I have just slightly more than that and we're doing everything we can just to pay it down. Even if that means taking on a 2nd job and lowering the amount going into a 401/retirement. I've heard too many horror stories about "debt consolidation loans" that end up hurting you in the long and it's just not worth that risk.

Have you cut everything that you can cut (cable, going out, etc)?

[jackie011]

Is this where you transfer your cc balances to the discover card personal loan? We get those offers from time to time and I anyways wonder about them. My few google attempts only bring up bad reviews. But, who's going to write a good review of a loan?

[phunluvin82]

I don't think the type of loan you are referring to will damage your credit. Like @crackhabit said, if it is a debt consolidation or debt relief company, that can end up being bad b/c many of them are sketchy and/or are not paying your debts in full but are cutting deals w/ lenders and such, regardless of how it will appear on your credit report.

One through Discover would basically just be a personal loan that you use to consolidate and pay off debt so it shouldn't affect your credit any more so than any loan for other things would.

The main thing that could backfire with this is if you take the loan and then you end up running the credit cards back up again. Then you've got credit cards to pay AND a loan to pay and are worse off than when you started.

If you feel sure you wouldn't do that, then it might be worth looking into. Calculate how much it will actually save you in interest once all is said and done. Are there additional fees? Read the fine print.

I have done this with a loan through my local bank and it worked out well b/c there were zero fees and the interest rate was about half what my CC interest rate was IIRC.

[Deleted]

We took a unsecured loan through a credit union and paid off a credit card many years ago. It worked for us because the interest rate was much lower.