What is the difference between credit card consolidation and loan consolidation?
Question by : What is the difference in between credit card consolidation and loan consolidation?
I am confused. What is credit card consolidation? What is loan consolidation? What is a debt consolidation loan?
Greatest answer:
Solution by Leslie K
A loan consolidation and a debt consolidation are the exact same. A bank loans you sufficient cash to spend off credit cards or loans (like a car loan). They group it all into 1 single loan via them (therefore the word “consolidation”). So they take all your outstanding “debt” and place it in one particular single loan with a fixed regular monthly payment.
A credit card consolidation can be 1 of two things:
Initial – You take a credit card and “transfer” the balances of all your other credit cards onto it. Then you have only one single credit card bill.
Second – A debt consolidation loan wherever you get a loan through a financial institution to spend off credit card debt. Sometimes the financial institution will want you to cancel the cards also. Not constantly.
Hope this can help!
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Credit card consolidation is combining the debts and credit lines of two cards if issued by the same bank.One credit card is closed. If different banks, then one bank does a payoff by balance transfer to the other and the line is not closed.
Loan consolidation can be combining student loans to consolidating a group of loans into one large one. There is only one payment and usually at a lower APR. Usually secured by real estate, this is very common.