My concern is that all of my loans will be in one lump sum on a credit card. There will no longer be any auto loan or student loan. It will look like I went shopping and won’t look very responsible
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if you keep all your credit card payments up, then i’d say go for it.
The credit rating is a tricky beast and is a combination of several different things. If you can save money by consolidating your debt with a lower interest rate, that’s a smart move. Just be careful with the card and read the fine print– the transactions you make with “cash” may be at a much higher rate.
Yes, it will hurt your credit score. You would give up the flexible options offered through student loan providers, end your beneficial mix of an installment loan as part of your credit accounts, and see a huge increase in revolving debt. Furthermore, the low rate on the card is not guaranteed (universal default). Refinancing your car might be a better option.
Maybe or maybe not…it really depends. Having a car loan is cheaper than putting the car on the very cheapest card (because you are only paying on it for a few years and with a card you will pay forever, your payments would be cheaper but in the end you would be paying much much more in interest). Student loans are a big tax benifit and you should keep paying that and not put it on the card (you can claim the interest paid on the student loan on your taxes)
Also, if you have more than 50% of your available credit charged that hurts your credit.
Your best bet it to just keep paying the loans…
Your credit rating will suffer because you’ll no longer have diversity in your types of accounts. This alone hurts your score. In addition, you’ll have a very high debt to credit limit ratio–assuming you’ll be close to maxing out the card after transferring those loans to it. That will further depress your score.
However, if the interest savings are significant–say 3% or more–I would do it anyway. You’ll have the debt paid off faster which will help your credit in the long run.
Things to consider though:
1. Only do this if you are disciplined enough to keep making your same fixed payments or higher to the credit card. You’ll end up paying MUCH more in the long run if you let that debt sit on a credit card for years and years without paying the principal.
2. Make sure the card rate is fixed and don’t ever pay late, or they can jack it up.
3. Your student loan debt is tax deductible. So make sure your rate on the credit card is much lower than your actual rate on the student loan (loan rate x tax rate is actual rate you’re paying).
It shouldn’t because your credit report will show two major accounts such as auto loan and student loan as being paid off. It may actually improve your credit.
Student loans and auto loans usually have interest rates lower then credit cards. If you are talking about a 0% introductory APR, you will need to have a plan to pay off the credit card within introductory period, or you will be on the hook for a higher rate. Also, make sure that your creditors accept credit card payments. If they don’t, you will need to cash the money somehow, and that is usually associated with a cost of at least 2%.
Good luck!
Yes, you’ll take non-revolving credit and turn it into revolving credit.
Two things to think about on student loans. One, you could be eligible for a low rate consolidation. check into that. Two, student loan interest is tax deductible for most so that lowers the effective interest rate, which could then be darn close to the interest rate you will pay on the card, unless it’s like 0% but that usually only lasts for up to 18 months.
Umm, I would really doubt that you have a credit card with a lower interest rate that your car and student loan…unless it’s an introductory, come-on, short-term rate. Read the fine print on the card. That “low” rate might only be for a couple months and then jump to 18%, 21% or even higher. Be careful!
If you have a poor credit score, it is difficult to get a loan from most banks and financial institutions. Credit is usually
available only at a very high interest rate.Only few companies provide loan with poor credit score.Check out link for details.
http://www.acreditlibrary.com/prosper.html
It concerns me that you would consider lumping your Student Loans together with your car loan. Are your Student Loans, Federal Student Loans?
If your Student Loans are in fact Federal Student Loans, combining the car loan and the Student Loans would cause you to lose all of your Federal Benefits that are attached to your Federal Student Loans. This includes your unlimited in school Deferment, your Federal subsidies, and your 36 months of Forbearance and Deferment if you would ever need a temporary timeout on your monthly payments.
Also, you Federal Student Loan interest is tax deductible which is another benefit that you would lose if you were to lump the two debt amounts together.
If you are concerned about improving your credit score I would suggest looking into the FFELP Consolidation Loan Program. Improving your credit score is one of the many benefits of this program, while at the same time allowing you to retain all your Federal Student Loan Benefits. For more information on combining your Federal Student Loan debt with other debt, please see the source below.