Consolidate high-interest CC debt (9%) to 12% personal loan or pay them off individually?

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  • #96002 Reply

      Hi everyone, Is it better to consolidate two CC one 8,000 and one that is 15,000 on to a personal loan with 12 percent interest rate? Or do the snow ball affect?

      Both CC have 9percent rates. I have always had 2,000 or less on a CC but these these last four years I haven’t been able to catch up… caretaking of elderly parents , paying for there personal needs, not being able to work fulltime due the expenses of daycare cost of food and not being eligible for food stamps etc. etc.

      I have worked overnight jobs these last two years trying to keep up with expenses so please no judgement.

      Thankfully in 3 months I will be able to work more hours so I am determined to not uses a CC anymore and just pay of these balance.

      Please be kind and advise what do you think is the best to get rid of these balances.

      #96003 Reply

        Snowball the smallest one and roll it forward when you get it paid off. Helping out family is wonderful but it can clobber your finances! Best of luck to you

        #96004 Reply

          The reason most people move debt around is to lower the rate. Whether you continue working on 2 debts or combine them into 1 your debt load is still $23k. Also, consolidation really does not benefit you as the consumer.

          What you can do is call each of the account holders and see if you qualify for a rate lower than 9% possibly but snowball makes the most sense here.

          #96005 Reply

            Your interest on the cc is lowest. Just start on the lowest to pay it off first, keep paying the minimum payment on the highest one and once you get the first one paid off pay that payment plus the minimum payment on the biggest one.

            #96006 Reply

              If you can commit to not using your credit cards, I would do refinance with the lower payment and pay extra whenever I could. I would not put up my house as collateral.

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