Consolidation Loan HELP!!

[Anonymous]

Hi All,

I am thinking to Consolidation all my personal loan into 1 loan.  I got approve for personal loan for $14,400 for the rate of 17.97% interest rate and 21.71% APR (yes very high)

I have the following loan i want to paid off with using my new loan.  The rest of my money will pay off 4 credit card total of 7K..

$2,700 @ 13.49%

$2,500 @ 10.49%

My question is does it worth for me to get another big loan to paid off these small loan and my credit cards, then all i have to do is dealt with 1 loan instead of all these debt i have?

Any input and advice would be much appreciated.  

Thanks in advance.

[Anonymous]

I would not take out a loan at 18% to pay off loans at 13.5% and 10.5%. Your idea of consolidation is a good one, but you need to find a better rate.

[Anonymous]

So at 18% (i know its a lot) of a loan is not a good ideas to paid off 13.5% and 10.5% (that's 24% combined)?

[Anonymous]

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@Anonymous wrote:

So at 18% (i know its a lot) of a loan is not a good ideas to paid off 13.5% and 10.5% (that's 24% combined)?

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That's incorrect.  Look at this  way using easier numbers.

@$100 @ 13.5% = $13.50/year in interest.

@$100 @ 10.5% = $10.50/year in interest.

That is $24/year on $200, or 12% interest for both.

Now, if you get a loan for $200 to pay the 2 off at 18% it would be $36 in interest.

So, you would be paying 6% more in interest by consolidating with that loan.

[bdhu2001]

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@Anonymous wrote:

So at 18% (i know its a lot) of a loan is not a good ideas to paid off 13.5% and 10.5% (that's 24% combined)?

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It's not 24% combined.  That's not how interest works.

[Anonymous]

Ahhh.....Now that make sense. I wasn't thinking of that.  Thanks for the explaination.

[elim]

Don't think i would consolidate at all...  Sock drawer any cards... Buckle down, and pay em' off.   It sux but i've done it a few times.

[Anonymous]

then at what rate would it make sense even if i had to payoff credit cards? remeber he is paying off credit cards and taking on another loan?

I believe when getting a consolidation loan

You must know 

a) if you will be getting bonus/extra money/job somewhere that brings in more $$$$$ in short period of time

b) The APR from personal loan compared to CC APR has advantages/potential.

c) You are not going to wait for months and months to payoff your personal loan. you will do practically a lot of things that bring money ASAP so personal loan can be paidoff immediately as that money arrives.