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Question for the Money Doctors

Question submitted on Jun 29, 2012.

Question

I am between 4 and 5,000.00 in debt, I pay out about 600 a month. Would I be better to get a loan and pay these off and have just one payment?

Answer

We need more information to be able to completely answer your question. Additional facts that would be helpful are:

1. What is the interest rate on your debt?

2. What are the repayment terms?

3. Is there a balloon payment?

4. How long do you have to pay off the debt?

5. What type of debit is this? Is it secured or unsecured?

6. What is your credit rating situation? Do you have good credit? Do you have sufficient income to pay off the debt? Do you have other collateral to secure the debt?

7. Is any of this debt student loans? There are some special opportunities with student loans. Congress is making changes to the interest rates right now.

8. Is any of this debt an automobile loan? This would be secured debt. If you have a late model car, you may be able to refinance your debt.

9. Do you have someone with stronger credit than yours who can co-sign a loan with you? This may be a way to get better terms on your debt.

10. It sounds like you are asking about a loan consolidation so all your debt is with one lender. This may or may not be a better deal for you.

11. You should contact your local Consumer Credit Counseling to review your debt situation. They are non-profit. You can contact them at 1-800-769-3571. Their website is www.consumercredit.com. You can also dial 211 in many cities and that will connect you with the United Way and they can make the appropriate referral.


For additional information visit http://www.360financialliteracy.org/