Does consolidating student loans hurt your credit
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When you are trying to get out of debt, consolidating credit cards or other loans can save you time and money.
Debt Consolidation Loans" data-reactid="12"Debt Consolidation Loans Getting a new loan to pay off other debts is the most popular way to consolidate.
It’s certainly what most people think of when they think of consolidation.
(Tip: Triple check to make sure you are dealing with a reputable site if you are shopping for a loan online.
Scams abound.)Effect on Your Credit: Consolidating credit cards with high balances using an installment loan — a loan with fixed monthly payments — may actually benefit your credit rating, especially if you use the loan to pay off credit cards that are near their limits.
So if you consolidate your debt by transferring credit card balances or by taking out a personal unsecured consolidation loan, you shouldn’t have any credit damage unless you miss a payment.
Peer-to-peer lenders like Lending and Prosper.com, for example, routinely make these kinds of loans to borrowers with good credit.
Your bank or credit union may also be willing to help you consolidate, and there are some online lenders that offer consolidation loans.
That one month of “missed” payments is usually a drop in the bucket compared to all the other payments that might have been late or missed while you were struggling.
Of course, if you have really excellent credit, then a few missed payments in the first month of your debt management program CAN make a difference and lower your scores.