Debt advice please ?

[lisa_queens]

Hi all,

I am new here so i don't expect hundreds of responses but a few would be nice, i don't like to admit it but i am somewhat of a shopaholic and am kinda over my head in debt and am considering consolidating all of my debts (after much research, a full days research lol), now from what i understand it is much cheaper to consolidate loans via the internet rather than using a normal bank ?

- Are /is using an online website safe to consolidate my debts with
- Are there any things i am missing, i mean in the fine print ?
- Will this help my credit rating
- Is it safe to punch in my real details to a consolidation website
- Finally !! (yay she is finished i hear you say lol) could anyone recommend a low rate consolidation website ?

Again sorry for asking here i don't have an "other half" or many friends outside of work and am not all that financially aware of what is available or what options i have, so i have asked here and hope some of you can point me in the right direction, appreciate any feedback, Thanks

Regards Lisa

[EconoMutt]

Have you tried posting on prosper.com?
I see many people using this service to consolidate their credit cards.

[disneysteve]

Welcome, Lisa. Generally nobody here is going to recommend debt consolidation. Essentially, the consolidation companies don't do much of anything that you can't do on your own for free.

If you'd like our help, you need to post the details of your situation. List your debts one by one with the type of debt, balance and interest rate. List your income and your monthly expenses. Lots of folks here will be happy to help by suggesting places to cut spending, increase income and start attacking your debt.

[TurnDebtIntoDebt]

Hi Lisa,

First, it is a good decision to do research first before diving right into action without considering the benefits and the risks. If you are considering debt consolidation, that is one the most popular means of getting out of debt. There more and more companies now that are coming into existence to offer this service. But you must be careful what company you use. Just to give you quick info on what to look for: 1) check the BBB to see their background, if they have had any complaints, and how many people they have helped. 2) Look into their fees 3) Be careful of the loan term. The longer the term, the more you will have to pay in interest rate charges, even though you may get a lower interest rate and monthly payment. Just to help you a little.

[Seeker]

Lisa,

DisneySteve is correct.

Debt Consolidation Companies will charge you a monthly fee for doing the same things you can do yourself or with our help.

Read the stickey at the top of this Debt category.

Companies will take your money and not pay your bills so that they can negotiate with the companies you owe money to. This ruins your credit score; and these companies do not care about your credit score. All they want to do, is make money off people already struggling.

Take each of your debts, list them. And take your income and set aside every extra dollar you can at either the highest interest rate debt, or the smallest balance debt.

The two schools of thought:
1) Payoff your smallest balance first and then when you clear that debt, throw all the money you were paying to it, into paying off the next smallest balance. Theme: make conquering debt into small milestones without regard to the highest costing debt.
or 2) Payoff the highest interest rate balance first and then when you've cleared that debt, throw all they money you were paying into that debt, into the next highest one. Theme: conquer the highest cost debts first and save the most money (but you may not see immediate rewards).

[payoutless]

Check out daveramsey.com and his books. He also has a class, Financial Peace University, you could probably find at a church or meeting center near your house. He keeps it simple and having people that are going through the same problems makes for a good support group.

Seeker hit on one of Dave's philosophies, debt snowball. Seeker labeled it the first school of thought. That one has served me well and enabled me to pay off over $5,000 in debt.

Since you don't have a significant other I would suggest finding someone that you will be accountable to, and to make a budget. You can still shop and have a budget. I would strongly suggest just working on paying of your debt. I have had many friends that have done the debt consolidation loans. They have all wound up owing more because their payments decreased on their current debt so they thought they had more money.

Good luck. I hope you are able to get out of debt soon.