Tell Me The Truth About Debt Consolidation

I was one of those smug, lucky types who made it through college and grad school without any student loan debt. I had some medical debt and a bit of “educational expenses” debt that I paid off slowly, over two years, after grad school.

Then I was debt free for two years. Clearly, I was doing adulthood right.

And then I racked up $15K in credit-card debt between 2012 and 2013, due to a failed business, a failed relationship, and two cross-country moves. (Yes, moving from Los Angeles to Seattle counts as vertically cross-country.)

Now I’m financially stable, and I’m using the snowball method (thanks, Dave Ramsey!) to pay off my credit cards, but I’m frustrated that it’s moving so slowly. I pay approximately $800 every month towards my debt. It’s my biggest expense, and I lose $300 of it instantly due to Sisyphean interest.

You don’t need me to tell you that it takes a long time to pay off debt. A lot of us are doing the same thing every month.

What I need is for you to tell me if it’s worth it to go into a bank-backed debt consolidation plan.

According to this plan, I could continue making $800 monthly payments and knock out my debt in a year.

When I search “the truth about debt consolidation,” I get shunted back to Dave Ramsey again, who states that “debt consolidation doesn’t work” because what you really need is a Total Money Makeover. Thanks for shilling your product and not answering my question, Dave.

I suspect debt consolidation will kick my credit score down a bit, but I’m self-employed right now and not planning to buy a car or anything like that anytime soon. I’m responsible, and I don’t miss payments. I would seem to be the ideal candidate for this plan.

So tell me why I shouldn’t do this. TELL ME.

(And then I’ll ask my CPA what he thinks.)

(Photo: Sean MacEntee)

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