Established Contributor
masscredit
Posts: 773
Registered: ‎07-17-2012
Consolidation Loan For Credit Card Balances?

My cards got a little bit of use for Christmas so they will take a part of the year to pay off. What do you guys think about a loan to consolidate them and have a (much) lower interest rate.  Plus, paying off that loan can only help improve the credit score.

 

And before anyone says it, I know... you don't want to do that then run up the balances again! :smileyhappy: 


|****$6000****|****$6000*****|****$4500*****|****$2500****|****$1600****|****$3000****|******$1350******|*****$700*****|
EX - 657 (MyFico 10/02/14) TU - 655 (Walmart 10/10/14 ) EQ 04 - 699 (DCU -09/26/14) EQ 08 - 658 (MyFico -10/25/14)
Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
Re: Consolidation Loan For Credit Card Balances?

You've already identified the biggest risk.  Beyond that, just look at the interest rate you can get, the amount of time you are planning to carry, figure out how much money your're going to save, and compare it to any fees associated with the loan.  I don't know what APRs you have on your cards, so can't really comment as to whether it is worth it.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Established Contributor
masscredit
Posts: 773
Registered: ‎07-17-2012
Re: Consolidation Loan For Credit Card Balances?

Recovering for a BK that was discharged in '10 so most interest is in the 18-21% range.  


|****$6000****|****$6000*****|****$4500*****|****$2500****|****$1600****|****$3000****|******$1350******|*****$700*****|
EX - 657 (MyFico 10/02/14) TU - 655 (Walmart 10/10/14 ) EQ 04 - 699 (DCU -09/26/14) EQ 08 - 658 (MyFico -10/25/14)
Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
Re: Consolidation Loan For Credit Card Balances?

masscredit wrote:

Recovering for a BK that was discharged in '10 so most interest is in the 18-21% range.  


And what rate can you on the consolidation loan?  Also, roughly how much balance?

Established Contributor
masscredit
Posts: 773
Registered: ‎07-17-2012
Re: Consolidation Loan For Credit Card Balances?

About $4500.00.  I just thought about this today so I haven't researched places yet. Possibly my credit union or online. Open to suggestions for that :smileyhappy: 

 

A buddy was going to consolidate his credit cards and car loan with Wells Fargo a few months ago but something didn't go right. They contacted him so it sounds like the offer was going to be in their favor. 


|****$6000****|****$6000*****|****$4500*****|****$2500****|****$1600****|****$3000****|******$1350******|*****$700*****|
EX - 657 (MyFico 10/02/14) TU - 655 (Walmart 10/10/14 ) EQ 04 - 699 (DCU -09/26/14) EQ 08 - 658 (MyFico -10/25/14)
Frequent Contributor
Imua
Posts: 292
Registered: ‎01-17-2009
Re: Consolidation Loan For Credit Card Balances?

rather than take out a loan, is there any way you could apply for a 0% BT credit card (term would need to be within the time linit you would be able to pay off the balances, e.g. 12 months, 18 months, etc)? 

 

i'm not usually a fan of applying for a cc just to do 0% BT, but it might be a better option than a loan.  

 


BofA visa $9.4k ... BofA Cash Rewards visa sig $10k ... Cap 1 Venture1 visa sig $10k ...
Chase Freedom visa $10k ... Macy's $1.5k ... Macy's Amex $5k ... Sam's Club $6.3k
myFICOs as of 3/25/14:...EX=809 .... EQ=802....TU=787
Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
Re: Consolidation Loan For Credit Card Balances?

Imua wrote:

rather than take out a loan, is there any way you could apply for a 0% BT credit card (term would need to be within the time linit you would be able to pay off the balances, e.g. 12 months, 18 months, etc)? 

 

i'm not usually a fan of applying for a cc just to do 0% BT, but it might be a better option than a loan.  

 


To build on this, most BT offers now come with a 3% fee.  However, you can avoid the fee by using the new card for all your monthly expenses, then taking the money you would have used to PIF that card and applying it to the balances of your old cards.  Of course, you still need to pay the minimum on the new card.  Depending on how much you spend per month for groceries, gas, utlities, etc., you can effectively transfer the balances from the higher APR cards to a 0% card fairly quickly without paying the BT fee.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


Take the FICO Fitness Challenge
Established Contributor
masscredit
Posts: 773
Registered: ‎07-17-2012
Re: Consolidation Loan For Credit Card Balances?

I wouldn't mind doing this but I don't think I'm at that point yet. My scores are hanging in the mid to upper 600s.  Highest CL is Target at $3k and highest Visa/MC is Barclay's at $2k. I think I'm about a year away from getting into the $5k+ cards.


|****$6000****|****$6000*****|****$4500*****|****$2500****|****$1600****|****$3000****|******$1350******|*****$700*****|
EX - 657 (MyFico 10/02/14) TU - 655 (Walmart 10/10/14 ) EQ 04 - 699 (DCU -09/26/14) EQ 08 - 658 (MyFico -10/25/14)
Senior Contributor
bichonmom
Posts: 3,318
Registered: ‎05-05-2011
Re: Consolidation Loan For Credit Card Balances?

masscredit wrote:

About $4500.00.  I just thought about this today so I haven't researched places yet. Possibly my credit union or online. Open to suggestions for that :smileyhappy: 

 

A buddy was going to consolidate his credit cards and car loan with Wells Fargo a few months ago but something didn't go right. They contacted him so it sounds like the offer was going to be in their favor. 


The problem you're going to have is that you have high util, based on the CLs in your sig and $4500 bal., and you have a fairly recent bk. a lot of places are going to be reluctant to give you a loan that, in effect, is just going to enable you to get further into debt. As the saying goes, it's easier to get credit when you DON'T need it.

 

your best bet is going to be a cu, if they aren't too conservative. Call and explain your plight and see what they're willing to do. FYI, its better if you can plan for spending like that. For example, you'd do better with CLIs on your current cards and getting a 0% bt card without this high util on your cr.

 

good luck!

 

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
EQ FICO 750 | TU FICO 761 (Walmart) | EX FAKO 767 | Goal: 800+

Edits, funky spacing and spelling due to my iPad not getting along with the forum editor!

Valued Contributor
kevinjjc
Posts: 1,331
Registered: ‎01-14-2009
Re: Consolidation Loan For Credit Card Balances?

bichonmom wrote:

masscredit wrote:

About $4500.00.  I just thought about this today so I haven't researched places yet. Possibly my credit union or online. Open to suggestions for that :smileyhappy: 

 

A buddy was going to consolidate his credit cards and car loan with Wells Fargo a few months ago but something didn't go right. They contacted him so it sounds like the offer was going to be in their favor. 


The problem you're going to have is that you have high util, based on the CLs in your sig and $4500 bal., and you have a fairly recent bk. a lot of places are going to be reluctant to give you a loan that, in effect, is just going to enable you to get further into debt. As the saying goes, it's easier to get credit when you DON'T need it.

 

your best bet is going to be a cu, if they aren't too conservative. Call and explain your plight and see what they're willing to do. FYI, its better if you can plan for spending like that. For example, you'd do better with CLIs on your current cards and getting a 0% bt card without this high util on your cr.

 

good luck!

 


+1  You should look into a CU for a personal loan or a debt consolidation loan.

 

Check out Northwest Federal Credit Union. Anyone can join by paying a one-time $10 fee to join the organization FAN (Financial Awareness Network). Also, as with all CU's, a minimum opening deposit into a Share Savings account is required to establish membership -- $5 for NWFCU.

 

https://www.nwfcu.org/loan-rates

 

Loan Type          Term                             APR* as low as

Personal            up to 48 months         7.00%
                             60 to 84 months        10.00%

 

This is the lowest rate that I could find for an unsecured signature loan.