In this episode, I’ll tell you the pros and cons of using personal loans to consolidate or pay off credit card debt.
You’ll find out the best places to apply for a personal loan and how consolidating affects your credit score.
Consolidation means that your various debts, whether they are credit card bills or loan payments, are rolled into one monthly payment.
If you have multiple credit card accounts or loans, consolidation may be a way to simplify or lower payments.
Money Girl explains the pros and cons of using personal loans to consolidate or pay off credit card debt.
You’ll find out the best places to apply for a personal loan and how consolidating affects your credit.
And you might be wondering how you can lower your interest rate, monthly payments, or both.
Let’s assume your credit card charges 18% APR, for example, and you qualify for a personal loan with a 12% APR.
You typically do this by taking out a new personal loan to repay your other existing debts, and then paying this new loan back over a set term.
This personal debt consolidation calculator is designed to help determine whether debt consolidation is right, in which case personal loans could be worth exploring.
Enter the credit cards, auto loans and other installment loans balances by clicking on the "Enter Data" button for each category.
Are you carrying credit card debt with sky-high interest rates — in addition to your student loans? But think carefully before you use a personal loan to pay off credit cards.
One potential option — which holds both upsides and downsides — is refinancing this debt by taking out a personal loan from a financial institution such as So Fi, Citizens Bank, or Upstart.