Home Equity Loan
Does getting a debt consolidation loan mess up your credit?
whats the best place to get a consolidation loan for debts with fair credit ... i dont want to mess up my credit anymore please advise...how soon an i purchase a home after getting this type of loan? i would like a starter home soon im tired of paying rent i want to consolidate all my bills into 1 payment and purchase a home please advise on situation and suggest areas to move too... thanks
Public Comments
- It should not hurt your credit as long as you make the payments on the loan, but be careful, these loans are not always at the best terms. Read the fine print on the interest rate, late fees, fees for early repayment, etc. to be sure this is a good deal. The best idea is to follow the method of Dave Ramsey - the "debt snowball" - to get out of debt. Pay minimum payments on everything except the smallest debt, which you send as much as you can to until it's paid off, then attack the next smallest and so on. An alternative is to pay the minimum payment on everything except the bill with the highest interest rate, which you send everything else to.
- I consolidated a few years ago. I did a debt reduction program. It does damage your credit, but at least there is an end in sight. The creditors and collection agencies stop calling if you deal with a good attorney. I used the Debt Reduction Law Center. Google it and give them a call. They work with you on the monthly payment amount and you can skip a payment without penalty if you need to. Good Luck!!
- Aggie is right. Debt consolidation loans in and of themselves aren't the problem. Not paying the minimum payments is. You can purchase a home immediately, too, if the credit is sufficient and the income can support both house and debt. Just don't jump into buying a house if you don't have some savings. It's easy to get in than it is to stay in sometimes.
- A lot of home lenders don't like to see debt consolidation on a credit report. So flat out wont lend, and others will jack up the rate. Talk to your bank or a mortgage broker to find out if there programs will accept you before you enter into the debt consolidation.
