Does consolidating your credit cards mean onlime dating sites
If you live that long, you'll pay ,917.63 in interest.
And that's presuming you don't charge another thing during that time.
Then, you make a single payment on that loan once a month.
But convenience doesn't automatically translate into savings.
A major appeal of consolidation loans is convenience.
Instead of paying 20 different creditors who charge different rates at different times of the month, you take out one big loan and pay off all those accounts.
Viale's statistics underscore a major problem with debt consolidation: It feeds upon the tendencies that got you in trouble in the first place.
If you make only the minimum monthly payments, it will take you 401 months -- or 33.4 years -- to erase your remaining ,000 balance.
According to proponents, leveraging your residence's value generates money to pay off other bills while offering a tax break, too. The biggest risk is that you could lose your home if you default on the loan.
"Some hardship occurs and now they have double the debt and if it's secured by their home, they could lose it," says Diane Giarratano, director of education at Garden State Consumer Credit Counseling in Freehold, N. And while equity loan interest generally is tax deductible, it could be limited in some situations.
There are debt-consolidation loans, balance transfers to a low-interest credit card, and home equity loans or lines of credit.
But, says Viale, 70 percent of Americans who take out a home equity loan or other type of loan to pay off credit cards end up with the same (if not higher) debt load within two years.