Debt Consolidation Loans??

[JonECat]

I had been looking at Debt Consolidation Loans for a while now, I am anywhere between $15-20k in debt including my car.

Is this the right way to go? Is there any collateral? Do I need to be a homeowner? (I'm not)

[Timberwolf]

[ QUOTE ]
JonECat2002 said:
I had been looking at Debt Consolidation Loans for a while now, I am anywhere between $15-20k in debt including my car.

[/ QUOTE ]
That isn't that bad, unless you have numerous creditors for smallish sums and the monthly payments are killing you.

[ QUOTE ]
Is this the right way to go?

[/ QUOTE ]
It can be, but not necessarily. You would have to be careful not to run up MORE debt which would only serve to put you back to square one.

[ QUOTE ]
Is there any collateral?

[/ QUOTE ]
There might be. If not, expect the interest rate to be higher (b/c the loan will be unsecured).

[ QUOTE ]
Do I need to be a homeowner? (I'm not)

[/ QUOTE ]
Not to the best of my knowledge, but it would certainly help.

My wife and I consolidated our debt about 5 years ago and it really helped. This is because at the rate we were paying things off, we wouldn't have been out of hock for 12 years. We secured a consolidation loan, lowered our monthly out lays by almost HALF and only added about 3 or 4 years onto the length of "debtfree"edness (would that be considered a Bushism?? LOL).

Really, what you need to do is total up your monthly outlays, figure out how long it would take you to get free of debt under that schedule, and then compare it to the ONE payment to the bank for the CL. Most times, you'll have a much lower monthly payment, but you'll be paying it for a longer period of time. Remember, you can always apply some of your "savings" to the principal of the loan.

[EagleTed]

I can't help you, Jon. I've never gone through one. Timberwolf's advice looks solid to me though. Why wouldn't your car be considered collateral?

I've been debt free for over 20 years, and I can tell you, it's a warm feeling to have.

Best to you