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What are some good ways to consolidate debt at a low interest rate?
Posted on 8/4/22 at 12:45 pm
Posted on 8/4/22 at 12:45 pm
A good ole baw I know has gotten himself into some credit card debt that is obviously at too high of an interest rate. He'd like to consolidate it into one lower payment but is having trouble finding a good solution to it. He has great credit but rates are just high right now, as is everything else. I suggested simply transferring it to another card with zero percent for 12-18 months but obviously one card isn't gonna cut it for the amount of debt we're talking about -- roughly $20-25 grand.
He's about to look into HELOC's and other options because the lowest rates he's found so far outside of a HELOC are around 9% interest, he'd like to find something lower than that. I'm not sure there are any options today that would be lower other than zero percent transfer options through other credit cards.
He'll see this thread here and maybe chime in if I have any details wrong, just trying to find some other options that maybe I'm not thinking of to help him.
He's about to look into HELOC's and other options because the lowest rates he's found so far outside of a HELOC are around 9% interest, he'd like to find something lower than that. I'm not sure there are any options today that would be lower other than zero percent transfer options through other credit cards.
He'll see this thread here and maybe chime in if I have any details wrong, just trying to find some other options that maybe I'm not thinking of to help him.
This post was edited on 8/4/22 at 12:48 pm
Posted on 8/4/22 at 1:14 pm to TDsngumbo
You sure know a lot about this person's finances.
Posted on 8/4/22 at 1:17 pm to Displaced
Take the 9% and run with it.
Never, hardly ever, trade unsecured debt with secured debt.
Never, hardly ever, trade unsecured debt with secured debt.
Posted on 8/4/22 at 1:19 pm to TDsngumbo
I hate to sound like Dave Ramsey, but the problem with transferring them to another card or a HELOC is that he feels like he accomplished something, when in reality he hasn’t.
He needs to make sure he changes his spending habits before doing any of this or he’ll wind up with a HELOC and all the cards maxed out again.
He needs to make sure he changes his spending habits before doing any of this or he’ll wind up with a HELOC and all the cards maxed out again.
Posted on 8/4/22 at 1:28 pm to Im4datigers
quote:
Never, hardly ever, trade unsecured debt with secured debt.
I agree with this, trading for secured debt has to be a last resort.
I would go with the 0% credit card for 12/18 months, even if it doesn't cover the entire balance. Hit minimum on any card he can't cover and pay the 0% aggressively. Then repeat the month before the 0% runs out and hope it's enough to cover the rest. He should also consider applying over the phone, in exchange for closing those credit cards, the cc company may be willing to increase his limits to cover more/all of the balances.
9% is better than the rates he's paying on his credit cards.
Does he have a 401(k), get he take a loan out there. I am not a fan of this approach, but I know many people are (and a few on here)
Posted on 8/4/22 at 1:54 pm to Weekend Warrior79
I would also venture to say if he has $25k in CC debt his score is probably in the 680 range max if everything is paid on time. Just even more reason to take the 9% interest and run with it.
Don’t forget the 3-5% balance transfer fees on the cards. Not a lot but they do add up and it’s not really 0% as advertised.
Don’t forget the 3-5% balance transfer fees on the cards. Not a lot but they do add up and it’s not really 0% as advertised.
Posted on 8/4/22 at 1:55 pm to TDsngumbo
(no message)
This post was edited on 10/26/22 at 9:24 am
Posted on 8/4/22 at 2:32 pm to Displaced
quote:
You sure know a lot about this person's finances.
This is a family member of mine.
Posted on 8/4/22 at 2:42 pm to TDsngumbo
quote:
This is a family member of mine.
A couple of nights ago, I had a family member call me, in tears, asking if I knew of any good bankruptcy attorneys in their state (not LA).
I had a feeling this person might have been living beyond their means... but they have about 50K in CC debt, over 1o accounts... all maxed out... all months late on payments.
She had also talked to one of those debt consolidation companies that advertise "do you owe 10K or more". I told her I never really heard any good stories about those companies.
I don't know what rates your relative has but I'm guessing they are in excess of 9 percent.
Is he still on time?
If so... a 0 percent card, 15 months, for say 10K at a 3% transfer rate means he will pay 10,300 back over 15 months.
Can he do that and pay the mins on the rest and then repeat it in 15 months?
9 percent loan again is likely less than what he has and it does give him the mental benefit of having an end date.
Posted on 8/4/22 at 3:55 pm to TDsngumbo
Why is the OP downvoted? Hey bro, take the 9% loan or whatever. Avoid the HELOC. Try to continue shopping around but if thats as good as it gets, take it.
Others also with good ideas.
After that, cut your credit card into pieces until your financial situation improves to the point you went get 25k+ in debt again.
shite happens. Main thing to do is to get rid of that CC debt and then ensure you cant do it to yourself again.
Others also with good ideas.
After that, cut your credit card into pieces until your financial situation improves to the point you went get 25k+ in debt again.
shite happens. Main thing to do is to get rid of that CC debt and then ensure you cant do it to yourself again.
This post was edited on 8/4/22 at 3:58 pm
Posted on 8/4/22 at 4:01 pm to TDsngumbo
Why wouldnt he just do a cash out refi vs a Heloc tied to prime with what is going on
Posted on 8/4/22 at 6:09 pm to SDVTiger
quote:
Why wouldnt he just do a cash out refi vs a Heloc tied to prime with what is going on
Because he would be converting unsecured debt into secured debt.
That’s the issue. Not heloc vs refi
Posted on 8/4/22 at 6:38 pm to LSUFanHouston
quote:
I don't know what rates your relative has but I'm guessing they are in excess of 9 percent.
Is he still on time?
This baw makes good money, I’m confident he’s making payments on time. He’s not trashy
! He just wants a lower rate. 
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