Sarah Rathner

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124 appearances 2 recordings 1 series first heard Dec 2022 last heard Feb 2023

Sarah Rathner’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · How Debt Consolidation Works and Downsides to Watch Out For · 29 Dec 2022 podcast

And if you can qualify for loans that...

cost less, offer lower interest rates than what you were paying before, it could be a good option.

For some people, one of the benefits of consolidating your debts is that you can move your debt onto what's called an installment loan.

So with credit cards, you might owe different amounts every month because interest is accruing, you're using your card to continue to make charges, and it can be hard to budget when you owe a different amount of money every month.

But if you consolidate onto an installment loan where you owe one amount of money and you make equal monthly payments until that amount of money is paid off, it can be a lot easier to budget for that since it's the same amount every month.

debt consolidation loans are offered by the same kinds of lenders you'd turn to for other kinds of loans like auto loans or mortgages things like banks or credit unions are very common options and you can shop around for different kinds of personal loans nerd wallet offers comparison tools that can be very helpful as well and you can see what these banks and credit unions are offering you might even want to start with a bank or credit union you already have a relationship and then compare

their loans with what you might be able to get somewhere else.

And from there, you can pick a loan that offers you at least most of what you're looking for at a price that you're looking for and that you know that you'll qualify for.

It simply makes it more expensive to borrow money for any reason.

Not only do credit cards charge higher interest rates, but installment loans with fixed interest rates will cost more if you get them now versus if you were to get a loan like this even just a year ago.

So if you currently have existing loans that are fixed interest rate, you got them at a

affected by higher interest rates, at least as it pertains to those loans.

But any new loans and any credit cards you have are going to be affected.

Yeah.

For one thing, it depends on what you qualify for.

So one form of debt consolidation is actually a kind of credit card, a balance transfer credit card.

And that allows you to move a debt onto this new card and pay 0% interest for a period of time.

The issue is you typically need good or excellent credit to qualify for these cards.

If you don't qualify, another option could be a personal loan that's not going to be zero interest.

That's the drawback.

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