Posted on
March 17, 2010
at
2:03 am
Hi I think it would help me a lot if you would discuss - the pros and cons of consolidating debt. Thank you very much in advance!
Posted on
March 17, 2010
at
2:19 am
Hell there, before the pros and cons of consolidating debt - let me justtry to define what it means to consolidate debt. Debt consolidation is oftenmistaken to debt consolidation loan (which is a loan) - and debt consolidationcould be any of the two debt relief (programs) for unsecured debts - namelycredit counseling or debt settlement. Which of the two are you interested in?
Posted on
March 17, 2010
at
3:20 am
If it's debt consolidation loan - the pros are that you're going to be able to paya one time lump sum payment. The cons is of course it's just like refreshing yourdebt or adding up to it - with another debt. Getting a loan with a bad credit (as I assume is the case when people are asking for debt consolidation) is actuallynot advisable as you'd be given a much higher interest rate (also if you don't havean asset that your lender could tie your loan with) - so it is not advisable toobtain a loan for unsecured debts, at least.
Posted on
March 17, 2010
at
4:08 am
Consolidating debt - debt settlement - pros and cons - cons - it stays on your credit reportfor 7 years.
Posted on
March 17, 2010
at
4:52 am
Consolidating debt - debt settlement - pros and cons - pros - the debtsettlement program aims to reduce your balance to more or less half of itsoriginal amount. The program also guides you to save money for negotiation -and if you've completed the program - also save a some money aside. You'd be debt free in a year to three if you are determined to finish. About debtsettlement staying on your report for 7 years, nowadays, it's not such a big deal -creditors/lenders are aware of the financial crisis and so would not look upondebt settlement as something negative. The fact the consumer did something aboutthe debt, I suppose, is something that's supposed to be positive.
Posted on
March 17, 2010
at
5:00 am
Consolidating debt - credit counseling (Debt Management Plan) - pros and cons - pros-it helps you get to your principal debt amount much quicker - your monthly paymentis greatly reduced ($15/mo) - you could be debt free in 3-5 years.
Posted on
March 17, 2010
at
5:12 am
I see - and how much would debt settlement cost? How about my credit? wouldit suffer?
Posted on
March 17, 2010
at
5:14 am
Debt settlement would cost you 15% of your total debt amount(spread out over 18 months) or 20-25% of the settlement amount.As for your credit, I suppose it'd only improve once you get rid of the debt -realize that it's already bad when you entered the program. So it canonly get better from there.
Posted on
March 17, 2010
at
5:15 am
also A debt settlement appears on the credit report as "settled", "settled for less than the full balance", or "settled in full."
Posted on
March 17, 2010
at
5:19 am
To understand how debt settlement affects your credit byyour FICO score - here's a breakdown of which (note the boldedcomponents ::: they are the ones affected by nonpayment -
-35% Payment History- 30% Amount Owed-15% Length of Credit History-10% New Credit-10% Types of Credit Used
