My question is this, i owe out 1,900 in credit card debt. I know i know thats nothing compared to what others have. the reason being i only owe out that little is ive had this balance for the last 3 years since my credit history began. i was thinking of taking out a loan from prosper.com for 1900 to pay them all off and show on my credit report that i dont have any credit debt. and within another 2-3 months i should be able to pay off the 1900. if i dont the payments will be around 60$. right now with all my credit debt i comes to around 150 after paying doube the mimune payment. do you think this is a smart move? and would it hurt of help my credit score. right now its 705.
#1 by Stacy R on June 6, 2008 - 4:50 pm
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It doesn’t pay to borrow money to pay bills. Doesn’t make sense. You have a decent credit score, and they score you on timely payments.
#2 by Gigi on June 10, 2008 - 12:13 am
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I am not sure abt your credit score..but i have a friend who took loan to settle his credit card debts..
#3 by Chatmaster on June 11, 2008 - 4:23 pm
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Unfortunately if you take out a loan, it will still show up on your credit report. For me the best advice was to start knocking out debts using the “debt snowball ” method. What you do is write down all your debts and what the payments are(or what you are paying now), next to each one . List them in order from the lowest balance to the highest. Focus on paying off the lowest debt first. After that is paid off, add whatever you were paying to that lowest debt to the next one on the list. Keep adding payments till debts are gone! Do you see how this can work! I learned this at a” Financial Peace University” (Dave Ramsey) class–which I would recommend to everyone–especially someone first starting out. I had 9000 in debt last year and will be debt free by next October! Good Luck!
#4 by farrell h on June 14, 2008 - 10:05 am
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Debt settlement with a debt consolidation loan is a better option that bankruptcy. And if you own a home, you are at a much better position to get rid of your debt by consolidating your high interest credit card debt with a home equity loan.
Benefits of a Debt Consolidation Loan
Although a debt consolidation loan is not a magic way to eliminate your debts overnight, but it can help you to reduce your debt faster. As you know, credit card debts and other personal loans are high interest debts. In most cases, your minimum payment barely covers the interest incur by these high interest debts. Hence, you find it difficult to reduce these high interest debt’s balance if your are paying just the minimum payment.
If you lump all your credit cards debts and other personal loans into a consolidation loan, you can take advantage of lower interest rates and lower monthly payments offered by a consolidation loan. This enables you to enjoy debt free with a few years.
Conslidate Debts With Home Equity Loan
There are various ways to obtain debt consolidation loan. You could apply for personal loan or any unsecured loan with reasonable and lower interest rate as compare to your current debt’s interest rate and consolidate your debts into this loan. But, to obtain an unsecured loan, you need to have a good credit score else you loan application most probably will be rejected. Read more from: