I don't know, I just write this stuff...

August 4, 2009 11:22 AM

I've picked up a freelance job writing simple financial-advice articles, but now and then the topics they give me to write about don't always work. Sometimes it's easy for me to spot the ones that don't make sense -- but not always, because I don't have a financial background. Can someone who does tell me if this statement (inside) about loans makes sense?

This is a very basic-info type of site -- I've jokingly called it "Finance For Dummies" -- which features 200-500 word articles in a lot of discrete topics. For each of my assignments, I'm given a title (which I CANNOT change), and a couple key words. I must write the article to fit the title -- for example, if I get the title "How to apply for a HUD loan in ten steps," the article must describe the process one goes through to apply for a HUD loan, and I must have exactly ten steps. You get the idea. But I just got a title which sounds completely nonsensical. I've been asked to write about: "Should I Prepay My Credit Card Debt Consolidation Loan?"

Now, from what I'VE found, it isn't even POSSIBLE to prepay a debt consolidation loan. As I understand it, a debt consolidation loan means that you take out one big loan to pay off smaller loans, and then you make monthly payments towards that big loan. Am I right about that, and if so, am I right that you cannot prepay a debt consolidation loan even if you wanted to? Or is there something about the world of debt consolidation that I don't know about?

Fortunately, if I get an article title that doesn't make sense, I can contact the editors for clarification (I recently did that for something that made no sense whatsoever, and the editor agreed that he didn't get it either and changed the title); but I'm often loath to do so, because I don't have a financial background, and I like to be sure that any of my misunderstanding isn't just my own ignorance talking.

Thanks.

posted by EmpressCallipygos to work & money (6 comments total)

This seems to be on the same subject: Prepaying an Unsecured Debt Consolidation Loan: Can (and Should) You?
posted by desjardins at 11:27 AM on August 4

*snerk* Actually, desjardins, that's the very site I write for. (That article is not one of mine, though; that would have been REALLY weird if it were.)
posted by EmpressCallipygos at 11:29 AM on August 4

Look at it this way: you are explaining a concept that obviously there is some contention or confusion on. People really need to know the answer to the question at hand. You yourself are not clear on it. So do what you do best: research, clarify and write.

By the way, if you are based in the US, your local Consumer Credit Counseling Service office would be a fount of knowledge for you on these seemingly obscure or "huh?" types of questions. (But you probably already know that! :)
posted by FergieBelle at 12:54 PM on August 4

I think pre-payment in this sense is in the mortgage sense -- paying down some of the principal ahead of schedule to reduce the term or interest on the loan -- rather than in the credit card or funeral sense of pre-paying before you get it.
posted by jacquilynne at 1:27 PM on August 4

So if I understand you call correctly - it sounds more like they say "prepay" when they mean "pay more than the monthly payment each month". I think that's where the disconnect was coming in -- I was hearing "prepay" and thinking of something like a prepaid phone card, and just couldn't get to grips with how that would work in this context.

Okay, I think I have a direction to move in now. Thanks -- leaving this up in case anyone else wants to weigh in, but I'm a bit clearer on the topic now.
posted by EmpressCallipygos at 2:02 PM on August 4

Maybe I'm posting this too late, but FWIW I had a debt consolidation loan through my credit union at one time, and I was allowed to (and frequently did) make early/extra payments.
posted by Vorteks at 8:35 AM on August 12