A Better Way to Wipe Your Credit Card Clean
Are you looking for a better option for credit-card repayment? If so, read on.
Credit Card Consolidation: Clear Your Credit Card Balance
Between them, US citizens owe a total of $1 trillion in credit card debt. Credit card interest rates are, in many cases, higher than those you will experience for your car loan, mortgage and student loan altogether. To avoid being consumed by exponential interest payments, you might adopt a wiser approach: credit card consolidation.
By taking out a personal loan, you could consolidate all of your credit card debt. Personal loans for this purpose are often known as ‘credit card consolidation loans’. Using this method, you can move all of your credit card debt across to an unsecured personal loan. Repayable over 2 to 7 years, the value of these loans typically range between $1,000 and $100,000.
Slash your interest payments
With APR as high as 25%, some credit cards could see you paying a higher interest rate for credit than you pay for all of your other, combined, consumer debts. Indeed, some interest rates make it almost impossible to wipe a credit card balance clean. On the other hand, personal loan rates can, depending on your credit score, be as low as 5.47%.
Regular monthly payments
With variable rates, credit card interest will shift as you repay your borrowing. Personal loans, conversely, have a fixed rate. With a fixed rate, you will pay a set total every month, irrespective of any changes in interest rates. As a result, personal loans make interest repayments much more predictable.
These days, personal loans and interest rates can be compared online. Indeed, you can even make your application online, allowing lenders to assess your financial health and credit score, and offer you an interest rate. If any of the rates offered are lower than that of your credit card, you might benefit from a consolidation loan. As well as being straight-forward, the process is also quick – your new personal loan could be funded within a matter of days.
What savings could I make, by consolidating my credit card debt?
When considering the potential savings of credit card debt consolidation, consider the following.
Imagine you had $10,000 of credit card debt, with a combined interest rate of 18% and a monthly repayment of $250. If you also had a good credit rating, you might be able to secure a consolidation loan with a 7% interest rate and five-year repayment plan. This would save you a monthly total of $52 and an overall total of $3,369.