If you ever are in the predicament of having to take out a Debt Consolidation Loan, don’t do it unless you are willing to change whatever it is that put you in that predicament. Otherwise, in the future, you will likely find yourself in that predicament again.
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September 28, 2008 at 1:43 am |
I was just wondering how the actual loan process works, I have a little over ten thousand dollars worth of debt and the only feasible way for me to afford this is to pay it all in one lump sum each month. So have any pointers on how I got about getting a consolidation loan? And what exactly happens? Does the bank or credit union you are going through pay them or do they deposit the money into your account and you are responsible for paying them. If you could please help me out that would be wonderful .
September 29, 2008 at 9:18 am |
Hi Ashley,
The process works like this. Once the loan is approved, the credit union would send the payoff amounts directly to the other places you owe. That pays them off, leaving only the new loan at the credit union. There are places out there which offer something like you mentioned. These are companies that talk to your creditors on your behalf and try to work out special arrangements to pay them of over time. You need to be careful with those because there are some places like that who take advantage of people. So if you go that route, check them out first!
Be careful about taking a high interest consolidation loan. Those can be just as tough as paying lots of smaller loans. The first thing to try when you’re overwhelmed financially is to not look for someone to ‘bail’ you out with a consolidation loan. It’s to try to alter your spending habits to pay extra on the debts you already have and most importantly to not take on more debt. That was the essence of my post. Consolidation loans only work long term if you can avoid taking on other future debts. I hope that helps. Everyone’s situation is different. If you are a Piedmont Credit Union member I’d be glad to meet with you to talk further or to sit down and see what the best course of action might be for you. Thanks for your comment!
October 8, 2008 at 3:26 pm |
Forget loans – just do debt consolidation. That in itself is a huge help.
October 9, 2008 at 8:28 am |
Debt consolidation, to me, IS a loan. It might be packaged differently, sort of how pay-day lenders charge “fees” instead of interest. Please re-read my comment above. If you ever do a debt consolidation,slow down, be careful, do your preliminary homework, and read every line no matter how small the print! The only thing that truly reduces one’s debt for good is a lifestyle shift towards living on less that you make.