If you are struggling to make your credit card payments every month and wondering when and how you will ever pay down your credit cards, it may be time to consolidate credit card debt using a personal loan.
First, ask yourself these questions:
Are you paying high interest on your credit card debt?
Do you have a large credit card balance?
Are carrying balances on multiple credit cards?
Are you looking for alternatives to expensive cash advances from your credit card?
Do you have medical expenses or large purchases that you would rather not put on a high interest credit card?
If you answered “Yes” to any of these questions, a personal loan might be a good option.
How Personal Loans Can Help Lower Your Debt
If you have been carrying credit card debt, or you need to finance medical expenses or other large purchases and don’t want to use high interest credit cards, a personal loan may be a good option. Personal loans often offer lower interest rates and better payment terms than credit cards do.
Today there are many types of personal loan lenders in the marketplace. Some cater to high credit borrowers. Others are low credit friendly. In addition, if you consolidate credit card debt with a personal loan, you may be able to obtain a personal loan with a lower monthly payment that can free up some cash for emergency savings, or a small investment fund to hedge your debts.
If any of the scenarios below apply to your situation, consider looking into a personal loan.
If the interest you’re paying in credit card debt is greater?than the interest you can get on a personal loan. (Remember to look at all the associated expenses on the credit card and the loan -? both interest and fees.)
If you’re looking to consolidate multiple credit cards into one simple, lower monthly payment.
If you’re looking to finance a large purchase or medical procedure at a lower interest rate.
Before Taking A Personal Loan, Do These Things
Call your credit card company and ask for better terms. Sometimes you can negotiate a lower interest rate, smaller monthly payment, or fee waivers.
Look into transferring high interest credit card balances to a 0% APR credit card. Many credit cards offer an introductory APR of 0%, up to the first 12-24 months. If you think you can pay down your credit card during the introductory period, this may be a good option for you.
If you decide to take on a personal loan,?research the lenders. Make sure there are no pre-payment penalties, fees, and no introductory rates that then go up,
Compare offers from different lenders. Don’t go with the first offer you see. It’s now easy to compare across many lenders at once.
Don’t use your cards!?There is no sense in consolidating credit card debt only to run up your credit cards again. Put them in a? safe place but don’t cancel them. Keeping your accounts open and paid off will increase your credit score.
Go on a spending diet. Cut back on all the little things that add up at the end of the month. Turn it into a game. See how much you can save. Use our?free app to help you stay on top of your game.
Set up a budget. Figure out where your money is going. Designate different buckets for each spending category. When that category is depleted (e.g. movies), don’t spend beyond it.
This week:?Will rising interest rates benefit savers? Millennials are stuck with a chunk of consumer debt in student loans, Most people are not assertive enough with their finances, The skinny on credit card debt consolidation loans, Difficult choices for the house rich/savings poor,? A decade after the financial crisis – how are we doing?
While most people take ownership of their education, professional careers, and personal lives, they are less assertive when it comes to finances. This one mistake keeps them somewhat powerless over their life. Financial expert Suze Orman believes that the biggest mistake most people make, whether they are wealthy or not, is not taking an active role in handling their own finances.
Confidence and mindset are at the crux of the issue. People get excited about spending money but look at saving money as drudgery. People need to get just as excited about saving money and learn to enjoy the journey. We need to get more involved with our finances. So, while other projects may seem more important or urgent, we don’t want to forget about the most important one – financial health.
You will never be powerful in life until you are powerful over your own money. How you think about it, how you feel about it, and how you invest it.?
If you have an adjustable rate mortgage or a credit card, you probably know that you will be affected by the Fed’s ongoing rising interest rates. But what about the interest rates on your savings accounts? Will rising interest rates benefit savers, too? The short answer is ?yes, but??
Unfortunately, interest rates for savers will not increase in step with interest rates for borrowers. What?s a saver to do? These days the best savings rates are offered by online banks rather than traditional brick and mortar banks.
If you are looking for greater returns on your savings without the risk of the stock market, you need to look at online banks.
Homeownership is the largest source of wealth for Americans over 45. As Gen Xers and Baby Boomers are closing in on retirement, those who have most of their assets in their house are looking at some big questions. And the answers may not be what they want to hear.
Depending upon your situation, you may find that your plan to try to stay in your home as long as possible may not be the best. For many Americans who are house rich and savings poor, downsizing and investing their house equity for retirement may turn out to be the best option. But it?s easier said than done. Financial reality and sentiment are not always compatible.
With more than 3 million members of the baby boom generation turning 66 this year alone, many are wondering whether ? and how ? to use their housing wealth to pay for retirement.
It?s been 10 years since the 2008 financial crisis. According to Lending Tree?s Consumer Debt Report, while our overall debt has increased 1 trillion, our types of debt have shifted considerably. Even though mortgages weigh the most in debt analysis, while in 2008 they represented 98% of disposable income, today that figure has dropped to 68%.
Consumer debt, inclusive of student loans, auto loans and credit card debt, has increased 45% in the last decade. In fact, student loan debt now represents 42% of all consumer debt while credit card debt comprises only 27%. 10 years ago, those figures were reversed. This means that millennials, who hold most of the student loan debt today, are shouldering a large percentage of the overall consumer debt for the country.
By the end of the second quarter 2018, we’ll have $1 trillion more in household debt than we did in 2008 ? and none of it is attributable to housing.