Is consolidating high interest credit card debt into a personal loan a bad idea?

Asked by Jon, 48198 Fri Jul 4, 2008

I'm not doing this to reduce monthly payments, only interest. My monthly payment on a 48 month, 11.99% personal loan will be about the same as the min. monthly payments of the higher interest credit cards. I'm looking to buy a home in a few months to a year from now. My credit score is in the 720s and my monthly debt obligation will be the same if I consolidate, but I'll save money over the coming years on interest.

Help the community by answering this question:

+ web reference
Web reference:


Daniellaming, Both Buyer And Seller, London, OH
Thu Feb 25, 2010
“…A debt consolidation association will treat you with the professionalism that you deserve, and they will work with you to develop a program that will work in helping you get your personal finances back under control. At the end of the day, it is always a good thing to seek out the help of qualified professionals in the debt industry when you feel like your debt is starting to overrun your life…” added H. Milla.

0 votes
Don Tepper, Agent, Burke, VA
Fri Jul 4, 2008
Talk to a good mortgage broker. There are considerations other than those you raise here that enter into the picture. For example, from the perspective of your credit score, the closer you are to maxing out your credit limit on a card, the harder the hit on your credit. So, it's better to owe $3,000 each on cards having a maximum limit of $10,000 than to owe $9,000 on one card having a $10,000 limit.

And check with a CPA, too. In general, though, without knowing anything about your financials (other than what you've presented here) is that it's almost always wise to replace higher interest debt with lower interest debt.

Hope that helps.
0 votes
Susan Wesely, , Saint Paul, MN
Fri Jul 4, 2008
This sounds like a great idea, but there may be costs/fees you aren't considering. I recommmend that you talk with a mortgage loan officer or a financial planner to get his/her perspective. At the same time, ask for guidance on optimizing your credit position, so that you are in the best possible position when you are ready to buy. Best of luck!
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Jul 4, 2008
Talk with a CPA this would not be a forum to discuss this subject matter
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more