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Debt Consolidation

July 22nd, 2006 at 06:41 am

One of the hardest parts of being so heavy into debt is keeping track of everything. I am constantly logging into the credit card websites, checking balances/APRs/etc, tracking payment due dates, and the list goes on. I've been doing this for the past few years, and it's getting old! So, 2 weeks ago, I decided that I would follow the advice I've come across and call to get a lower rate on my credit cards.

I had a credit card through MBNA with a ridiculously high rate (30%+), so that is where I started. I called them and told them that I had to have a lower rate or I would be taking my balance elsewhere. I spoke to the rep for a bit about why I was lowering my rates, and he mentioned to me that they have a debt consolidation program that they offer that is geared towards people that are currently working on paying off their debt. We went over my balances, he pulled my credit, and I now have $11,000 of my debt, 4 accounts-worth, rolled into a consolidation loan. My monthly payment on the loan is around $80 less than the combined payments on the 4 accounts, the interest is lower than the combined rate, and I am one step closer to taking control of this beast!

I now have a consolidation loan ($11,000), a Dell charge account ($3,000), and my IRS tax bill ($3,000). The minimum payments are as follows:

Consolidation: $250/month
Dell: $100/month
IRS: $125/month
---------------
Total: $475/month

3 payments is a lot easier to handle than 6, and my total minimum payments have gone down. I won't be paying any less (in fact, I'll be paying far more) but it's nice to know that I have some padding if I have a bad month.

Posted in Thoughts, Feelings, etc | 5 Comments »

5 Responses to “Debt Consolidation”

  1. campfrugal Says:
    July 22nd, 2006 at 01:07 pm 1153573634
    1153573634

    I agree that the less payments to make the easier. You can actually see where your money is going. Also, if you can afford to pay just a little bit more than the minimum, those debts will get paid off a lot faster and with less interest. Good job and good luck.

  2. ima saver Says:
    July 22nd, 2006 at 01:37 pm 1153575460
    1153575460

    Can I ask, what is the new rate you got for your consolidation? I think 30% is terrible, I never heard of anything being that high!!

  3. squatto Says:
    July 22nd, 2006 at 04:23 pm 1153585407
    1153585407

    My new rate is around 20% (21% I believe) Still pretty high, but considering that all of my accounts were 26% or higher, I'm at least saving money! Also, considering that I'm paying $1000-1500 on the debt each month, the accrued interest won't be too hard to handle =) (more about that in my next post!)

  4. Homebody Says:
    July 22nd, 2006 at 05:30 pm 1153589414
    1153589414

    You may start receiving even lower offers in the mail. Keep up on your payments on time and you should be eligible for even lower rates. There is nothing wrong with transferring the whole balance to even lower rates. My MD's boyfriend had one card that high and applied over the internet and got 0% for six months. You might want to try that. Good luck!

  5. daybyday Says:
    July 22nd, 2006 at 06:05 pm 1153591506
    1153591506

    Good job at getting a better deal!

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