I got a loan offer in the mail, what are the pros and cons of accepting? is this very risky?

Question

it says im pre qualified, all i have to do is go to their office and it will take about five minutes, its for five to seven thousand five hundred dollars. it did not come with terms and conditions.

i just want to use it to pay off my debt and the rest i will use to pay the loan off itself.

its from citi financial. and i have a citi card so i wasnt sure if its related to the info they have from the credit card i have.

Answer 1

I have never heard of having to go to an office to apply for this kind of credit.  It is always a mail application or phone application.  However the down side could be the interest rate.  Check it out very carefully.  Often they give you an initial low rate and then have the option of raising it later.  You could actually end up worse than you are now.

Answer 2

Always check interest rates!!! It may be a good idea, but go talk first and get all the terms before you sign.

Answer 3

One of the worst things that you can do to yourself creditwise is to accept a loan from a financial company, such as CitiFinancial, Wells Fargo Financial, HFC, Beneficial, etc.  These are lenders of last resort, and they will drag down your score.  Capital One is not much better.

If you are in a position where you have to get the loan in order to handle your current debt load, then do what you must.  If you can get by without the loan, then avoid it.

I can only offer so much help here without advertising a solution.  Good luck!

Answer 4

I would strongly advise against it.  When a financial institution solicits people to take out a loan, it's because they stand to make a lot of money from it.  They want you to come in person so they can use their often high pressure, and misleading sales tactics.  The profits they make from issuing these loans come from the high interest rates they charge.  

I think that you would be better off continuing to pay on your debt.  Did you know you can call your debtors and ask for a reduced APR?  Most of them will do it because they would rather get at least some of the money owed them, rather than get none at all if the person files bankruptcy.

Taking out a loan from one of these companies, to pay off other debts will only put you deeper into debt.  I know this from my own past experiences.  It took me much longer to pay it back than it would have if I had never taken out a loan.  I'm debt-free now and loving it.