If you pay off credit cards by getting a loan out, aren't you in the same positi

1. 73

   G Miahposted 15 years ago

   If you pay off credit cards by getting a loan out, aren't you in the same position still?
   
   Maybe a loan won't have interest increase like credit cards, but what is the best way to get out of this situation for good?

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2. 58

   MonsterManiacposted 15 years ago

   that is true, but i mean as long as the loan still paid on time in such it only impacts your credit for the good and yea im sure the rates on a loan will be much more satifying then a credit card....but in my eyes its not something that i would ever do because your creating twice the debt really!!!

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3. 69

   brad4lposted 15 years ago

   Yes and no. Often, people will take out a loan or even refinance their home to include their other debt, such as school loans, as it lowers their monthly payouts or means they will be paying less in interest.
   
   In the end, this debt swap doesn't always work out in the favor of the debtor, but it sometimes gives them a little bit of breathing room to get back on their feet.
   
   Ultimately, even though you still owe basically the same amount of money, if you end up with better terms for your payout, then you aren't in the SAME position, but a slightly better one. Of course, not everyone ends up on top and if you have poor credit, then you might not end up with better terms, but worse.

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4. 58

   hubber-2009posted 15 years ago

   Before spending the amount. take care of your capacity of repayment..if you are satisfied proceed, else don't use it..

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5. 61

   LaViejaposted 15 years ago

   If you can afford the loan repayments, I think it can be quite a sensible thing to do. But only if 1.as soon as you get the loan you clear the credit card. 2.you then cut up the credit card and don't use it again. It won't work if you clear the credit card, and then keep using it- you will then have the loan and the credit card to pay and that is not a good position to be in.

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6. 60

   AnywhereGardenerposted 15 years ago

   Yes, unless you:
   
   1.  Cut up and don't use credit cards again
   2. Get a better interest rate on the loan than you have on the cards.
   3. Don't stretch the loan out too many years and make the payment the highest you can comfortably afford.
   4.  Don't take out more credit cards, department store cards, just say NO!
   Otherwise you will have more credit card debts plus a loan to pay off and this is hard to do for many people. A lot of people get in trouble by even taking out a home equity loan to consolidate their debts then when they see how they can now easily get by each month they feel they can afford more debt and end up back in the same boat, actually worse off than they were before.

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7. 62

   Karina S.posted 15 years ago

   It depends. Of course, best way to pay for credit cards -is to create a budget, save money where you can, pay more than minimum payment, and do not, do not get more debt.
   Or get a loan with lower interest, pay off credit cards and then start paying your loan off. That way money that you save with lower interest rate can be used toward paying for your debt.
   I hope this helps.

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8. 59

   zgzeh1posted 15 years ago

   Nobody wants bad credit.  Better to owe Sallie Mae, rather than your credit cards.
   -pay off your credit card with a loan.  If you can, put the card away for a while.  Use it for things you know you can pay off. 
   -Make your payments on the loan.

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9. 59

   infoebooksonlineposted 15 years ago

   If you get a loan to pay off your credit card you have set monthly repayments and you cannot redraw on the amount paid off. That is the important point. With a credit card you can redraw and many people do hence never get it paid off.  Not only cut up your credit card but close it.  From then on use a debit visa card which means you have the facility of a visa card but can only use money that is already in your account.

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10. 61

    Curious Jenposted 15 years ago

    if the interest rate on the loan is less than the interest rate on the credit card you are in a better situation.  Make sure that you don't load up the credit card again until the loan is paid off.

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11. 0

    Deborah Sextonposted 15 years ago

    No. There is only one bill and one finance charge. It is easier to keep up with so you're not late with payments.
    The interest rate of course is the same and not varied.

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12. 61

    Shona Venterposted 14 years ago

    Only if the interest rate on the loan is lower than that of the credit card.
    
    Another factor to take into consideration is the term/length of the loan. The longer you take to repay the loan, the more interest you will end up paying in the long run, regardless of whether the interest rate is lower or not.
    
    The best course of action to take is to try to sell off excess items, or try to earn a little extra cash if possible, and channel these amounts towards your card payments, to get them paid down faster. Speaking from experience, it worked for me, along with a heavy dose of self-discipline, and learning to say 'no' to myself when the items in question weren't necessary.

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13. 60

    andygiffyposted 14 years ago

    credit cards are a form of unsecured debt and there for non priority. Alot of people try and rob Peter to pay back Paul so to speak and it doesnt work. Getting more credit to pay of existing credit is just trapping you in that vicious circle. If you can pay things then great but borrowing more is inevitably a sign that you are trying to side step the problem / swerve your debt. There are other ways.

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14. 60

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