Is it a good idea to take out a loan and pay off credit card debt?

[margotb822]

I have two credit cards, one at 11% and the other at 14%. Is it a good idea to take out a loan, pay them off, and just pay the loan instead. I'm not using them at this point, just trying to pay them down. I don't have a house to use as equity, so it would just be a loan. Can I even get a loan these days?

[knowbody0]

1. wait til you get a zero interest offer

and a below factory price. it's coming.

[RUMMYisFROSTED]

2. If the loan rate is lower than 11%.

:think:

[margotb822]

3. That's what I figured

I just wondered if there were any "professional" opinions out there. I like to get other's opinions to ensure I don't end up cutting my nose off.

[SoCalDem]

4. debt consolidation loans only help if you cut up the cards and NEVER charge them up again

and if you can get decent rates & terms for the loan.. and it may be hard to even GET one of those now... loans usually require collateral..and someone with credit card debt may not seem to be the kind of person banks want to loan to right now.. They would be assuming YOUR debt (that you have trouble paying), and shouldering it themselves.. Would they be sure you could pay THEM???

[Better Believe It]

5. If You Have Enough Money & High Credit Card Rating to Get A Loan

you don't need a loan. That's my guess.

Banks can't get loans now.

In any case, I wouldn't worry much about credit card debt now. Tens of millions of people owe a lot of money on their cards and will never pay them off.

Hopefully an economist will read your post and give you better advice than me.

[tammywammy]

6. If you can get a loan for less than 11%

And keep not charging on them.

[rucky]

7. You probably won't find an unsecured loan for under 11%

Even equity lines are in the double digits these days.

Also, if you are worried about your FICO score, I'd just pay them down, as opposed to getting more credit.

[jtrockville]

9. UNSECURED is the key.

I would never trade unsecured debt for secured debt, no matter what the rate.

[Lakerstan]

8. Some good replies above...

I work in the Finance industry, and I'd first agree that if you get a zero interest credit card offer for the life of the balance, it is ideal. Be careful of two things, however:

1. A balance transfer fee may cost you more than you would save by transferring the balances. Figure that out first.
2. If you are late even once, your zero interest offer could skyrocket. Be sure to pay on time!

If you can get a personal loan for less than 11%, go for it, but again - watch for fees (including pre-payment penalties). I doubt you'll be able to find one with that low interest rate, however.

Family and Friends are always good - they don't charge late fees :-)

[margotb822]

10. My mom said her IRA has lost $70k in value this year

Somehow, I don't think she's willing to loan me money.

For some reason, I just don't like having credit card loans. I pay my student and car loans on time, and I pay more than the minimum on my monthly credit card balances. I will look into the balance transfer though. Thanks!