Many people face the problems of credit card debts that they can never clear. They are only able to afford to make the minimum payment just to get the balance roll over to the next month. No one like to get stuck in a debt situation. Everyone wants to clear away their debts as fast as possible but they can’t do so when they are not having enough income. Getting a personal loan is one of the methods to consolidate your credit card debt.
You use the funds from the personal loans to pay off all your existing credit card debts and then make a single monthly repayment to the personal loans lender. Using a personal loan to consolidate your credit card debt will give you 3 – 5 years to clear up the debt. At least, you now know that your entire debt will be cleared if you consistently make repayment every month until the end of the loan term. With credit cards, you just keep rolling the balance from month to month and you don’t know when you will ever clear off the debt.
When shopping for a personal loan for debt consolidation purposes, you must spend time doing some calculation to make sure that the APR interest rate and fees cost is lower compared to the interest rate and fees that you are currently paying to your credit card companies. You can use a loan comparison search engine to quickly compare the interest rate of various debt consolidation personal loans. The interest rate displayed on the comparison search engine is only an estimate.
You can click the check rate button to prequalify for the loan prior to applying it. Prequalifying for the loan will give a rough idea on the actual interest rate that you will be paying in the event that the loan gets approved. This is because the different interest rate is assigned to different customers based on various factors such as income, and credit history.
You can apply online for a personal loan to consolidate a moderate amount of credit card debts. Before applying, you should ask yourself if you have the means to afford the monthly repayment for the next 5 years. A personal loan is not suitable for you if you are not sure how you are going to come up with money to pay the loan in the next five years. If you have the financial means to pay back the loan in 6 months to 2 years, it is recommended that you sign up a balance transfer card to consolidate your debts.
It is important that you discipline yourself and always stick to a budget so that you will always have money to pay the loan every month. If you don’t develop a discipline of your finance, you will find yourself taking out new loans and end up in greater debt problems.