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Would a personal loan to pay credit card debt be better then a debt management program?

I have about 25000 of debt but can still pay montlhy payments on time and never missed a payment. . . if I try to get a personal loan from say lendingtree. com as opposed to a debt management program which looks better to creditors?? My beacon score is around 650-670. . . . I am going to a credit counseling agency to see what they think. . . . they are HUD approved and non-profit. I still have some assets stocks and bonds totaling 6000. . . I do get paid consistently and been trying some internet surveys to make some small money on the side to my job. What things should I look for at the credit counseling agency? Such as if they are legit or not in my situation?

This entry was posted on Thursday, August 26th, 2010 at 1:09 am and is filed under Debt Management. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

6 Responses to “Would a personal loan to pay credit card debt be better then a debt management program?”


  1. Fixing things on yoru own is ALWAYS best– those credit counseling places might be non profit but they ask for donations– AND They hurt your score while you are in them.

    If you are able to make your payments on time, you may not even qualify for their help.

    Have you tried calling yoru CC’s directly and discussing payment plans/ideas that would get you out of debt sooner? Perhaps if you add just $10 a montht they will cut your APR or lower fees. They really do try to help if you talk to them.

    Also, 25K is an extreme amoutn of money for an unsecured loan. Unless you have a newer car you can put up as collateral, it would be VERY hard to get a loan that large.


  2. Hey debt rules my life as well, you are not alone. A quick, well dumb question. Are you a student? If you are you can get student loans, at a low-low fixed interest rate to pay off credit cards, my old roomate did it. maybe you can do something. If not, yeah i would get a lendingtree-style loan b/c to creditors, you establish credit by paying it off ina timely fashion. Your score isn’t too bad as of right now, you’ll get something-if you go to debt management-I would think creditors see that as a reason to charge you higher rates, you already had to go to debt management-why would you pay this one timely?


  3. Most credit counseling agencys do the same thing:

    1. Tell you to cut up your credit cards to prevent farther use.
    2. Negotiate settlement amounts with each CC lendor. This is a ‘write off’ and will be reflected as such on your credit record.
    3. Establish a set monthly payment amount that you would send to them and that they then forward to the various CC companies.

    While your credit report would reflect the debt management program it would also reflect the settlement of your debts for less that amount owed. Thus, this will have a negative impact on your credit score albeit a less of an impact than if you got way behind and the accounts went to collections.

    Here’s my recommendation.

    1. Create a list of all your debts and put them in a table that list who, current balance, monthly payment, interest rate, due date and credit limit.
    2. Create a list of all your assets and put them in a similiar table that list Who, current balance, interest rate and penalty amount for early withdrawl.
    3. Sort your debt list by Interest rate listing the highest interest rate first. You will want to ‘pay off’ from this list starting from the top and working down.
    4. Sort your asset list by interest rate starting with the lowest. You will want to use the first listed funds to pay on your debt as these are the ones returning the least amount on your investment.
    5. With these two list it will be obvious that retaining a large amount of cash that is drawing a small amount of interest is not good when compared to the high interest rate you are paying out.
    6. Set a minimul amount of your investement asset that you want to keep for emergency.
    7. Using your calculated available cash, begin to pay off or pay down your debt.

    While paying down the debt with the biggest interest rate will save you the most over the long run, you may be better off paying down or paying off those where the monthly payment will be reduced the most and/or removed altogether. Thus, you might be able to use $4,000 of your investment to drop your monthly payments by over $150 and then you can use that ‘extra’ to compensate for the short fall in cash you have and/or pay down the other bills quicker.

    All in all, you need to organize your assets and liablities in a manner that works for you and the go through a few scenarios to determine the best method for you.

    Hope this helps and good luck!


  4. I have been in the collections/credit industry for 19 years. My suggestion to you would be to try to get a loan instead of credit counseling agency. The difference is with a loan you can pay of all your debts at once. If you go thru a credit counseling agency they will still make payments and depending on the creditor interest will still accumilate.


  5. never ever go with a debt counseling company. you can do everything yourself. if you can get a loan and pay for it, go for that.


  6. Hello, check these links, there’s plenty
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    http://finance.ebookorama.com
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    http://credit-repair.ebookorama.com
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