My friend has about 20k in credit card debt spread across 6 cards with an interest rate on average of about 24%. She is able to pay a little more than the minimum but obviously continuing this way will end up with her paying a lot of interest over quite some time. What is her best option in trying to get a lower rate.
I imagine her credit card score isn't too stellar at this point so how likely would it be to transfer the balance over to multiple cards at a better rate as i assume the debt would be too much to put on one card. Also is a debt consolidation loan a reasonable possibility? She does not own a home. Thanks for your insight.
First of all ask her to pull a copy of her credit report, and then check the status of all the credit card accounts. If she still has not defaulted on any of the cards, you can ask her to consolidate her debts.
Debt consolidation lowers the interest rate, and thus it becomes much easier to pay off the debts. In debt consolidation, all the debts are consolidated into one, and thus a single loan is taken to pay off the debts. Under debt consolidation, you need to make a single payment. Consolidation doesn't even affect your credit negatively.
Your personal details (name, email address and phone number) will be delivered to the company advertised on the Creditmagic after ve agreed to go for the counseling session by filling out the no-obligation form. However, it is your discretion to accept or reject their services.
Not all the creditors/debt collectors agree to trim down the outstanding balances, interests, and fees payable by the consumer.
Consumers working with the debt relief companies can still be sued by the creditors/collection agencies.
Debt relief services may have a diminishing effect on the creditworthiness of the consumer. The total outstanding balance may increase as the additional fees get accrued.
The overall amount saved by the consumer through the debt relief services is considered as taxable income by the IRS.