Should You Take Out A Loan To Pay Off Credit Card Debt

Should You Take Out A Loan To Pay Off Credit Card Debt – “Peer-reviewed” means that the article has been thoroughly evaluated for accuracy and clarity by our Financial Review Board. The review team consists of a group of financial professionals whose mission is to ensure that our content is always objective and balanced.

By Nicole Dicker Nicole Dicker Arrow Fair Personal Finance Contributor Nicole Dicker has been a full-time freelance writer since 2012. and a personal finance enthusiast since 2004, when he graduated college and discovered a damaged copy while seeking financial advice. Your money or your life at the public library. In addition to writing, his work has appeared in CreditCards.com, Vox, Lifehacker, Popular Science, The Penny Hoarder, The Simple Dollar, and NBC News. Dicker spent five years as a writer and editor for Billfold, a personal finance blog where people talk openly about money. Dicker also teaches writing, freelancing, and publishing classes, and works with authors as a development editor and copy editor. Connect with Nicole Dicker on Twitter Connect with Nicole Dicker on LinkedIn Nicole Dicker

Should You Take Out A Loan To Pay Off Credit Card Debt

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If you have credit card debt, you know how frustrating it can be trying to balance multiple credit card payments each month. Can you pay more than the minimum payment on each card? How many more? Should you focus on paying off a card with a high balance or a card with a high interest rate?

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Taking out a personal loan for credit card debt can help solve many of these problems. You can use your personal loan to pay off your credit card debt in full, and since personal loans sometimes have lower interest rates than credit cards, you can also save money on interest over time.

There are pros and cons to paying off credit card debt with a personal loan. Let’s look at the pros and cons and explore some options to help you pay off your credit card debt without taking out a personal loan.

Using a personal loan for credit card debt is a form of debt consolidation, and consolidating debt into one monthly payment has many advantages. Here are the top three reasons why you should use a personal loan to pay off credit card debt:

If you have a high credit card balance, a personal loan can help you pay off your credit card debt in full. This step will not only give you the peace of mind of being free of credit card debt, but it can also boost your credit score.

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Remember that using a personal loan to pay off credit card debt is not the same as getting out of debt. Even after paying off your credit cards, you should pay off your personal debt. However, paying off large credit card balances and saying goodbye to the high interest rates that come with them can be a huge financial relief and one of the biggest benefits of paying off your debt with a personal loan.

The average credit card interest rate is currently 20 percent APR, but the average personal loan APR is closer to 11 percent. Although your actual interest rate depends on your credit score, the amount of money you plan to borrow, and the terms of the loan, your personal loan APR will likely be lower than your credit card APR.

If you take out a personal loan at a lower interest rate than what you pay on your credit cards, you can save a lot of money on interest charges by using a personal loan to pay off your credit card debt.

Balancing multiple credit card payments each month can be difficult. Personal loans allow you to consolidate the loan into one monthly payment. This process will make it easier to plan ahead and set aside money for your monthly loan payments, which will help you pay off your personal loan faster.

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Remember: The more money you pay toward your loan payments each month, the more money you save in interest over time.

While there are many advantages to using a personal loan for credit card debt, there are also some disadvantages, including the possibility of falling back into credit card debt. Here are the top four disadvantages of paying with a credit card versus a personal loan:

While personal loans can help you pay off your credit card debt in full, it’s important to remember that a personal loan is just another type of loan. Once you pay off your credit cards, you won’t be debt-free — you’ll still have to pay off your personal debt and make monthly payments without taking on new credit card debt. .

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