Quote:
Originally Posted by richard200593
try to make this as short as possible- paying off credit card debt with a personal loan at still a relatively high interest rate. Credit is poor strictly due to high balances on all of my cards, all “credit analyzer tools” are expecting 100 point jump in my credit once cards are paid off as there are no other marks on my credit. Is it smart IF this happens to refinance another personal loan to pay off the high interest loan?
Ps- credit card debt is from years of being young and foolish, I have my finances under control now, just trying to tackle the previous mistakes.
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Is it smart to transfer debt from one place to another? Only if the interest rate drops and the term to pay it off stays the same or decreases. The real question is what are you going to do to keep from racking up debt again once this is paid off?
Credit scores are only good if you're looking to borrow money again so a credit score is more like an "I love debt" score. Some will argue that you have to have credit so you can buy a house and that is 100% false. You can get a home loan with a zero credit score using manual underwriting, a term your lender should know, if they don't you're using the wrong lender. IMO, the expectation of jumping your score 100 points is irrelevant.
Personally I would recommend if you can get a lower interest rate and pay the debt off in equal time or less then a transfer of debt is not a bad way to go. Just don't load the cards back up when you transfer the debt and you will be ahead.
Also, DO NOT take a loan out that will put your house as collateral. Credit card debt is unsecured debt where putting a lean against your house is secured debt. If things go south for you financially, you have an option to keep your house in a bankruptcy and still eliminate credit card debt, but if the debt has gone against your house because you transferred it in a refinance loan then that debt is now against your house and cannot be eliminated without losing the house.