There is an old expression that relates to loan debt, that goes “you are robbing Peter to pay Paul.” This means you are moving your debt around without doing anything to alleviate that financial burden.
When time is short, and you need to make a payment, it may seem like a good move to borrow again, to pay off the first debt.
Is it a good idea?
All Loan Debt is Not the Same
All loans are not created equal. Not just in regards to their monetary value, but their terms and conditions as well. Borrowing from “Peter” may be a far sight more expensive than a loan from “Paul” and by moving that debt around you could be increasing it.
In theory, if you can find a better loan, with more favorable terms and a lower APR, it would be smart to transfer that debt. This is fairly common with credit cards, as one card will offer a slightly lower rate if you transfer your balance.
Do the research. Read and learn about every loan you can, so you can find a better loan, and move that loan debt to someplace that benefits you.
Make Careful Choices
The mistake people make when trying to transfer or move around their loan debt is that they make decisions in desperation. If and when you decide to change lender, or take out one loan to pay off existing debt, only do it after careful consideration.
Don’t do it just because you are on a deadline and need to make a fast choice. Without doing your due diligence on the terms and conditions of the loans, you might be setting yourself up for much greater debt.
Not to mention, it is not a move you can make very often. Once lenders see a pattern of moving debt around, they will be far less likely to offer you any credit at all.
NSL offers small dollar installment loans, where credit is not an issue.