Credit Card Debt Consolidation Loans

Featured Credit Card Debt Consolidation Loan

A GE Money Debt Consolidation Loan is a sure fire way to stop juggling multiple debt repayments on your credit cards, store cards, car loan etc. By rolling all your debts into one simple repayment you will better be able to manage your debts become debt free sooner. The best thing about GE Money Debt Consolidation is the fixed repayments and interest rate so you can remain 100% in control during the life of the loan.

Features:

• Consolidate your credit cards, store cards, bills and other loans into just one easy to manage loan.
• Set a loan term that suits your budget and you could reduce your monthly outgoings.
• The repayment amount is fixed so it is easier to budget.
• Choose your own repayment frequency – weekly, fortnightly or monthly
• Fixed interest rate for the life of the loan.
• Make easy repayments using Direct Debit.
• No maximum loan amount (*subject to approval)
• Get approved within 24 hours of your application

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A credit card debt consolidation loan is different to consolidating your credit card debts onto a balance transfer card. This latter actions means we intend to find another credit card with a lower rate of interest – most often an introductory period offer – and shift all our existing debts to that one card.

Whilst this balance transfer option may be preferable as it allows you to reduce your rate of interest to a lower one for a certain period of time, it may not always be possible. It may be that your credit rating will not allow such a manoeuvre, possibly because it has been done too often in the past, or it may be that your debts are so unwieldy that you cannot find a credit limit that would come close to accommodating them.

If this is the case, then a credit card debt consolidation loan may be the answer. With this, there are two options. The first is an unsecured personal loan, and the other is to add your credit card debts to your mortgage. Either of these will certainly work, but they have their advantages and disadvantages. The key factors here will be the rate of interest applied to the loan or mortgage, and the term of the loan.

The advantages of a credit card debt consolidation loan:

A credit card debt consolidation loan will clear your credit cards of debt. Provided you do not begin to run up any new debts on them, you can then concentrate on just one repayment each month, which should be at a much lower rate of interest. Depending on the term of the loan, it may pretty much equate to a lifetime balance transfer to another credit card. This means that you can relax a bit, knowing a much lower monthly payment is taking the pressure off.

The disadvantages of a credit card debt consolidation loan:

If taken out over a much longer period, which may well be the case when adding credit card debts to a mortgage, the cumulative effects of the interest charges on a credit card debt consolidation loan will make this a very expensive long-term solution. You may be looking at interest payments that reach into many thousands of dollars, rather than just a few hundred. You should also be careful with your loan-to-value ratio. If your original mortgage kept this below the 80% threshold, then you will have avoided paying Lender’s Mortgage Insurance. Adding new debts to your mortgage could push your loan-to-value ratio above 80%.

You should think very carefully before taking a credit card debt consolidation loan, and it certainly should not be your first resort to tackle credit card debt.

• Comparison of Top 10 Credit Card Offers

Editor's Choice: Our Top Credit Cards

Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
HSBC Credit Card	Editor's Choice: 0% for 6 months Balance Transfer & No Annual Fee Featuring a $0 annual fee for life, and 0% p.a. balance transfer for 6 months, the HSBC Credit Card was voted the Best Transactor Credit Card for 2010.	16.99%	20.75%	0% for 6 months	$0	55
Suncorp Clear Options Standard Visa Card	A great 12 month balance transfer offer, combined with a low annual fee and a good interest rate on purchases.	12.24%	17.99%	1.9% for 12 months	$39	0