Is it healthy to acquire a loan to service a debt?

1. 57

   borowestposted 12 years ago

   Is it healthy to acquire a loan  to service a debt?

   replyreport
2. 0

   msivakumarposted 12 years ago

   Not healthy, but on a practical note - if the cost of the new loan is less than that of the existing debt (taking into account "all" the charges) then you can go for it. By "all" here I mean the charges like pre-closure, service charges etc.
   
   For ex, you can take a personal loan from a bank to close your (much costly) credit card dues.

   replyreport
3. 65

   ronhiposted 12 years ago

   The rule of thumb is, if you are already in a hole, stop digging

   replyreport
4. 60

   marymootooposted 12 years ago

   Never never borrow to pay of a debt, unless you make sure that this will be your only debt. Return your credit cards to the people who supplied them closing the account and do not be sucked into opening others.
   The situation of debt is to borrow tomorrows money to fund yesterday whims.
   Sure borrow money to by a car that suits your needs borrow money to by your house, but if you need to borrow money to by  the yacht then you cant afford it.

   replyreport
5. 82

   arksysposted 12 years ago

   not healthy unless you're at a point where you can pay it off but just need a little more time.

   replyreport
6. 59

   Mac31posted 12 years ago

   I think that the only way this would even make sense would be to look at the interest rate that you have with your current debt.  If your interest is a whole lot higher than the loan that you are going to get you just might save yourself more money by having a lower interest rate.
   
   Hope that helps!

   replyreport