Consolidating credit card debt with a personal loan

You should get free debt advice before taking out a debt consolidation loan.A better option might be a 0% or low-interest balance transfer card.Lenders will consider that person’s credit and income as well as yours, and the cosigner will be 100 percent responsible for repaying the loan if you stop making payments.Cosigners are taking a huge risk, and some people can’t afford to take that risk, but if you’re fortunate enough to have a cosigner available, you might get better terms on a loan. Instead of relying on your credit and income, lenders can get their money back by taking something you own (the collateral).That said, consolidation isn’t the only way to pay off credit cards – it’s just a strategy that help you simplify and save money.

Especially if you only make the minimum payment, you’re barely making a dent in your loan balance, and it can be hard to keep your head above water.For example, what if interest rates go up, or you fall ill or lose your job?If you can’t stop spending on credit cards, for example because you’re using them to pay household bills, this is a sign of problem debt.Before you start the process of consolidation, make sure it really makes sense.You might end up hurting your credit or spending more money than you would if you just paid off your cards.

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