Failing to pay a personal loan as agreed will hurt your credit, so stay on top of your loan payments and work to Credit card consolidation can affect your credit in many ways, depending on which strategy you choose.
For example, if you’re consolidating multiple balances onto one card, you’ll want to avoid maxing out that card’s credit limit, because that will hurt your credit utilization rate (how much debt you’re carrying compared to your total credit limit).
Some strategies will be more affordable than others, and your credit card consolidation choices may be limited by your credit standing.
Personal loans charge simple interest (as opposed to credit cards, which often have variable rates and sometimes have different rates for balance transfers and purchases on the same card) and they typically have loan terms of three to five years.
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So make sure you are ready to live credit card free for a while.And you can verify if a lender is registered to do business in your state by contacting your state Attorney General’s office or your state’s Department of Banking or Financial Regulation.Beware of any lender that promises to offer you a loan regardless of your credit.Here’s how credit card consolidation works: You first decide if you want to take out a new loan, open a new credit card or enroll in a debt management plan (more on that later).Whichever option you choose, you will use it to pay off your multiple balances.(Not every creditor has to participate, so you may be able to keep a credit card out of the debt management plan if you need it to remain open for travel or business purposes, for example.)Once you complete your plan, some of your creditors may re-establish your credit based on your new, debt-free status and the on-time payment history you established through the course of the debt management plan.