Who should I try and get a consolidation loan from?

[Anonymous]

Hello

I'm trying to get my debt paid off and i've been thinking about getting one lone for all my credit cards. My wife and I have 2 auto loans, 1 signature loan, and 5 credit cards. I would like to put them all into a fixed loan. Its not a big deal if they can't do the auto loans.

I got the sig loan from my bank for as much as I could but they wouldnt give me enough to cover the credit cards.

Do you know of any lenders that I should look into for a consolidation loan?

My wife and I have some really good spreadsheets we use for our payment plan but if we can get fixed loans instead of the revoulving credit cards we can pay this off in no time.

The problem i'm having is my credit score is low only 606. Thats mostly becuse I have a charge off on my report that is incorrect. I've reported it but the bank says its valid so unless I pay a lawyer I don't know how to get it removed.

Thanks for the advice.

[Anonymous]

From stories that I've heard, it seems like people who obtains loans to cover their other financial obligations dig a deeper hole than they were before. Have you tried talking with your creditors to see if they are willing to help? Do you have cards with a nice interest rate in which you can do a balance transfer? But if you really decide to go with the loan consolidation and get approved, I highly recommend you close most of your cards except for maybe a couple and taking advantage of doing a PIF each month for each card.

[marty56]

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@Anonymous wrote:

My wife and I have some really good spreadsheets we use for our payment plan but if we can get fixed loans instead of the revoulving credit cards we can pay this off in no time.

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Unless the interest rates are much lower, I dont see how you could pay the loan off quicker by refing the loan. 

You might want to look into the so-called Debt Snowball aproach to debt where you make minimum payments all all cards except the one with the smallest balance and pay as much as you can until it is PIF.  Then repeat for the next smallest balance and so on.

[PayYouNever]

Regarding the Debt Snowball strategey... is it better to pay off the smallest balance first, then go to the next one, or is it better to pay of the deby with the highest APR and then move to the next highest APR?

I would opt for the higest APR, because that balance could double (per Rule of 72) in the time it takes you to get to that balance.

[Scamp]

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PayYouNever wrote:

Regarding the Debt Snowball strategey... is it better to pay off the smallest balance first, then go to the next one, or is it better to pay of the deby with the highest APR and then move to the next highest APR?

I would opt for the higest APR, because that balance could double (per Rule of 72) in the time it takes you to get to that balance.

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Money-wise, tackling the highest APR first and working down from there is your best bet, as it minimizes the amount of interest you pay in the long run; the version Marty mentioned, wherein you tackle the smallest balance, is good for people who benefit from the encouragement of seeing results more quickly than the APR version - it's really a case of what works best for you.