Consolidating and eliminating credit card debt
If you default on a personal loan, you won’t lose anything, unlike if you fail to make payments toward your car loan or mortgage, which are secured debts.
However, if you do default on a personal loan and your creditor sues you, a lien could be placed on your wages.
Stability comes with having one monthly payment due on a specific date.
It’s a methodical and effective way to get out of debt, since you can’t just make minimum payments that don’t put a dent in the total amount owed.
Finally, don’t ask for help from a friend or family member who is struggling financially.
Consider the pros and cons of borrowing from family and friends.
In this case, that’s only 0: still worth filling out the application.
There are a lot of potential lenders, so you can shop around and see which offers the best terms.
If the payment with a personal loan is higher than you can afford, ask for a longer repayment period to bring it down.
Using credit card balance transfers to consolidate your credit card debt is another way to save money on credit card interest and make progress toward paying down your debt. Take higher interest credit card debt and transfer the balance to a credit card that has a lower interest rate.
A personal loan is a good idea when the interest rate is lower than the average interest rate of your debts and the monthly payment is affordable.
For example, if you owe ,00 in credit card debt at 23.99% interest rate, and you qualify for a personal loan at 10%, you will save 99 per year or more than 0 per month in interest by taking out a personal loan.