Should I take a car loan (cash out) to pay off debt?

[need2improve]

hello all,

I've been thinking recently of selling my house, and purchasing a new one while the home prices are still low.  My fako scores had been improving, and I was feeling really good about paying off some debts I had been working really hard on.  Pulled my FICO scores today and was in for a real shocker....TU 560 and Equifax 556! I was really surprised because my fako scores are in the 650s, and I thought my FICO score would be around 620 (this is the number i've been aiming for).  I have a new suv that is paid off....should I take a loan against it and just pay off the rest of my debts and credit cards, and then just pay the loan back fast?  Would this help or hurt my score?  Would this help or hurt my attaining a mortgage? Or should I not bother with the loan and continue the course of paying off my debts little by little?  Thanks in advance!

[pizzadude]

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@need2improve wrote:

hello all,

I've been thinking recently of selling my house, and purchasing a new one while the home prices are still low.  My fako scores had been improving, and I was feeling really good about paying off some debts I had been working really hard on.  Pulled my FICO scores today and was in for a real shocker....TU 560 and Equifax 556! I was really surprised because my fako scores are in the 650s, and I thought my FICO score would be around 620 (this is the number i've been aiming for).  I have a new suv that is paid off....should I take a loan against it and just pay off the rest of my debts and credit cards, and then just pay the loan back fast?  Would this help or hurt my score?  Would this help or hurt my attaining a mortgage? Or should I not bother with the loan and continue the course of paying off my debts little by little?  Thanks in advance!

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What are your current interest rates on your credit cards, and what interest rate ( approx ) would you qualify for with your potential Auto Loan ?

[need2improve]

The interest will be high of course, it won't be any higher than what i am already paying...I'm not really gaining anything in terms of the interest. but rather will gain as the old debts will finally be paid off (which are charge offs and collections, and 1 judgement which is almost paid off), and i will have just one bill to pay and keep up with monthly.

[Anonymous]

Are those collections still accruing interest? I understand the desire for simplicity, but that convenience may end up costing you some serious cash...

[need2improve]

yes, they are unfortunately :-(  I have 2 accounts that are still accruing interest actually.  One of which is the one that is almost paid off.

[Anonymous]

Well, in that case it _might_ actually makes sense. If you'd like some more detailed advice, post the detailed data - each account, the balance, and the rates, and we can help you figure out the best plan.

[pizzadude]

Also give some thought to the term of the Auto loan that you would take....3 years ?  4 years ?   What time frame would you be looking at ?

Could you pay down the debt in the same period of time without consolidating it ?

[nws2002]

I'm not sure I would replace what I'm assuming are unsecured debts with a secured one.

Right now you have a vehicle, default on the loan however and that could disappear.  I don't think anyone really obtains a loan and with the intention of default, but life happens sometimes.