Consolidating credit card debt for students
In the case of most medical debt, consolidation might not be the answer if you are hoping to save money on interest payments.
Medical debt typically has a very low interest rate, and in some cases no interest.
By rolling medical debt into a debt consolidation loan or by paying for it with a low-interest credit card, you would have to pay the interest on new account—which in some cases could be more than the original rate.
In 2017, the three major credit bureaus added a policy that gives consumers a 180-day grace period to resolve outstanding medical debt before it appears as past due on their credit reports.
As you roll revolving credit debt into a debt consolidation loan, and if you keep your balances on those accounts low, this can help to reduce your credit utilization and in time help boost your credit score.
While you can consolidate many different types of existing debt, it is important to first know what the interest rate is on your current loan in order to see if debt consolidation will be helpful.
The main benefit of consolidating government-backed student loans is streamlining the payment process.
Your credit utilization ratio is calculated by comparing how much available credit you have and how much you use each month.People with "fair" to "exceptional" credit scores will have an easier time getting approved for a new loan, and will also be eligible for a lower interest rate.Knowing your credit score before you apply for debt consolidation loans will help you choose the right loan and avoid incurring multiple hard inquiries in a short period of time.This grace period is intended to give people extra time to settle any issues with insurance or to make a payment toward their debt.Depending on what type of student loans you have, there are various consolidation options available.