Harrison Funding is offering 3.03% a APR loan offers that are simply unrealistic unless you have excellent credit. Crixeo, the popular news and review site, has done a review of Harrison Funding and is still waiting to hear from someone who has been approved with an interest rate this low. Or Is it simply part of a long-running bait and switch scam?
According to Ed Miles of Crixeo, “The story is the same. They lure you in by sending you direct mail with a “personalized invitation code” and a low 3.03% APR to consolidate your high-interest credit card debt into a new personal loan. You will be directed to the My Harrison Funding website. More than likely you will not qualify for one of their personal loan offers and they will try and flip you into a more expensive debt product.
Many people find themselves in mounds of debt and in need of coronavirus credit relief, regardless of their economic or educational background. Thus, if you find yourself in this position, you are not alone.
There could be many reasons why you may have reached this point. It could be because you may have relied on credit cards a lot, have taken out student loans, suffered a personal tragedy or a professional setback. No matter what put you in this situation, it is essential to note that you can get out of it. Debt is not something you have to live with for years. Although it may take years to pay off your type of debt, doing so is not entirely impossible.
If you feel overwhelmed with your debt, debt consolidation may be a good idea for you. But before you consider and commit to this debt repayment method, it is essential that you first know everything about it. So, here is a list of in-depth answers to all the standard questions regarding debt consolidation.
1. What is Debt Consolidation?
Commonly referred to as credit card consolidation, this is a debt repayment strategy that involves combining all your multiple outstanding debts into one new loan. Once you start opting for it, you can start making only one monthly payment to pay back the loan instead of several payments.
If the interest on the loan is lower than the one you pay for your debts, then you save money.
2. What Are the Requirements to Get a Debt Consolidation Loan?
As is the case with other types of loans, a debt consolidation loan requires a good credit score. The better your credit score is, the higher are your chances of getting a lower interest rate. The other requirements to get a debt consolidation loan are:
- Proof of income
- Your credit history
- If you are financially stable
- If you have any collateral to offer, such as in the case of home equity
3. What Are My Debt Consolidation Options?
You have several options with debt consolidation. The five main ones include:
Credit Card Balance Transfers
In this option, you consolidate your debts by transferring the balance from your current credit card to another one that offers a lower interest rate. It also includes combining all the debt from multiple credit card balances to one with a lower interest rate.
Debt Consolidation Loans
This is used to obtain a loan from a bank or finance company to pay back multiple credit card debts or unsecured loans. Typically, the interest rate is comparatively lower with these loans as well.
Debt Consolidation Program
With a debt consolidation program, a credit counseling agency negotiates on your behalf with your creditor to discuss reducing the amount of interest you owe or removing it altogether. If you don’t qualify for a debt consolidation loan, your next option should be a debt consolidation program.
Home Equity Loan
This involves using your home as collateral to obtain a loan. The amount of the loan is determined according to the value of your home. However, this option is quite risky as you might lose your home if you cannot repay the loan.
Line of Credit
Obtaining a line of credit involves taking money from your bank. Your lines of credit may be secured or unsecured, depending on your credit score and income.
4. What Kind of Debts Can Be Included in Debt Consolidation?
It is important to note that typically unsecured debt can be paid off using debt consolidation. However, the kind of debt largely depends on the debt consolidation method you use. For secured loans, such as those tied to an asset, can be paid off using home equity loans or lines of credit.
Moreover, you can pay off your unsecured debts with a debt consolidation loan or debt consolidation program. Some of the unsecured loans include:
- Credit card debt
- Medical and utility bills
- Payday loans
- Unsecured lines of credit
5. What’s the Difference between Debt Consolidation and Debt Settlement?
Debt settlement involves hiring a debt settlement company that settles your debt on your behalf by negotiating with your creditors so that you can pay less than what you owe. However, this can hurt your credit score as it shows lenders that you may not be as consistent in paying back your loans. With debt consolidation, you are still making payments to a creditor. If you consistently make these payments, your credit score will not be negatively impacted.
6. Is Debt Consolidation the Same Thing as Debt Management?
While debt management is similar to debt consolidation, it does not involve a loan. In debt management, a credit counseling agency combines all your debts in one monthly payment in a debt management program. From there, the credit counseling agency pays the creditors. Your payments will be lower than what you actually owed because they negotiate lower interest rates.
7. Does Debt Consolidation Hurt My Credit History?
Debt consolidation may, in fact, improve your credit score in the long run. This is because it allows you to adequately address your debts. There are three factors you need to be mindful of if you do not want debt consolidation to hurt your credit history:
- Make consistent and regular payments
- Make sure that your credit utilization is below 30 percent
- You do not secure more credit or keep using your credit cards to accumulate more significant debt
The Bottom Line
If you still are confused or have more questions regarding debt consolidation, or any other questions about debt, do not hesitate to call a credit counseling agency. You can speak to them about your current financial situation and figure out your options and what to do next. Before you call them, make sure you research the credit counseling agency so they can give you the best advice.