The data shows that borrowers who have consolidated credit card debt saved more than $ 2,000 on average.

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It’s easy to get lost with credit card debt, but paying off the debt can seem like a much more daunting task. However, with the right financial products, you can get rid of credit card balances entirely. (iStock)

Credit card debt it is a drain on your budget and can prevent you from saving for important life events, such as a down payment on a home or your child’s college tuition. And considering that loan utilization jumped 8.8% in the second quarter of 2021You may be among the many Americans looking for ways to get out of debt.

One of the common ways to reduce an out-of-control credit card balance is debt consolidation loan… This is a type of personal loan that you take out at a lower interest rate than the one you currently pay on your credit cards in order to pay off debt faster and save money in the process.

In fact, you can save thousands of dollars by taking out a personal loan to pay off your credit cards. Borrowers who took out a personal loan for debt consolidation on the Credible online marketplace in May 2020 potential savings were $ 2,374.

Make sure you get the lowest possible interest rate on your personal loan by comparing offers from multiple lenders. You can compare individual loan offers in the online loan marketplace Credible, all without compromising your credit rating.

DOES A CREDIT CARD BALANCE TRANSFER AFFECT YOUR CREDIT STATEMENT?

How Consolidated Credit Card Loan Saved Over $ 2,000 For Borrowers

Personal loans are a popular option for debt consolidation because they have a low fixed interest rate and a consistent repayment schedule. An unsecured personal loan does not require the borrower to provide collateral, which provides quick access to funds. Often the loan amount can be transferred to your bank account the very next business day after approval.

These benefits are significant, but the real reason why personal loans are such a popular debt repayment strategy is the potential for cost savings. Credit card issuers offer some of the highest interest rates on the market, while private loans may offer a lower rate for borrowers with good or excellent credit history. In fact, highly qualified consumers who took out a personal debt consolidation loan in the online loan marketplace Credible saw potential savings of nearly $ 2,400.

Credible analyzed a sample of borrowers with a credit rating of 720-779 who took out a three-year personal debt consolidation loan during May 2020. Borrowers consolidated an average of US $ 18,000 at an average interest rate on an individual loan of 8.99%. Based on the average credit card interest rate of 16.61% at the time, borrowers could save $ 2,374 on total interest payments and even reduce your monthly payments at $ 66.

LONG-LONG SNOW METHOD VS. LONG AVALANCHE: WHAT IS THE DIFFERENCE?

The amount you can save depends on personal loan rate that you can secure… Interest rates on personal loans depend on the borrower’s FICO score and debt-to-income ratio, as well as the loan amount and the length of the maturity.

Since interest rates on personal loans can vary from lender to lender, it is important to choose the best rate for your financial situation. You can see your approximate personal loan rates for multiple lenders by filling out one form on Credible.

3 RISKS OF RELIABILITY ON BALANCE TRANSFER CREDIT CARDS

View your estimated monthly payments with your personal loan calculator

While credit cards require a minimum payment, personal loans have fixed monthly payments. This way, you will always know how much you owe and when you owe it. In addition, many private loan lenders offer discounted annual interest rate (APR) if you sign up for an automatic withdrawal system, it will give you the added benefit of paying on time.

Often borrowers can get a lower monthly payment by refinancing credit card debt with a personal loan thanks to the lower interest rates offered on personal loans. Here’s how to find out your monthly payment using Personal loan calculator Credible:

  • Calculate your credit card debt. With personal loans, you can combine balances from multiple credit cards or simply pay off one. You will indicate the total amount in the “Loan Amount” field.
  • Find your personal loan rate. You can pre-qualify for a personal loan on Credible to estimate your potential interest rate without affecting your credit rating.
  • Select the loan term. Long term personal loans may offer lower monthly payments, but you will likely get a higher rate and pay more interest over time.

COST OF A PERSONAL LOAN: ARE THERE WORTH THE COSTS?

This calculator will help you determine the amount of the loan payment, as well as the total amount of interest paid over the life of the loan. This way, you will be able to see if paying off your credit card debt is the best option for your financial situation.

Still not sure if credit card pooling is right for you? Contact a loan expert at Credible to explore your options for paying off high interest credit card debt.

HOW TO AVOID PENALTY MORTGAGES

Have a financial question but don’t know who to contact? Write to a safe money expert at moneyexpert@credible.com and your question can be answered by Credible in our Money Expert column.

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