Is it better to take a personal loan to pay off a credit card debt?
October 21st, 2009
Lizsplace asked:
I have had a credit card debt of just over $2000 for quite a while now and my monthly interest rates are almost $100! Is it worth taking out a personal loan at a much lower interest rate and paying that off instead?
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Absolutely, just remember to keep that CC home and not use for at least 14 months.
YES IF IT MUCH LOWER RATE. BUT DON’T TAKE A PERSONAL LOAN FOR A MUCH LOWER INTEREST RATE && THEN PAY IT FOR 5 YEARS OR LONGER THEN IT WOULD BE STUPID TO TAKE OUT A PERSONAL LOAN IN THE FIRST PLACE.
A lower interest rate is almost always better (assuming there are no additional fees involved). More of your payment goes to your debt and less to interest, enabling you to pay off the debt faster.
While a lowered interest rate may seem ideal, you would be trading an unsecured debt for a written secured debt.
If you do not default on the loan then you can save a lot of interest.
If you default on the loan, depending on your states exemption statutes, you may be at risk of losing personal property.
Look over your finances first to make sure that you can afford to pay it even if you lose your job, etc. You might also look over your states exemption statutes.
Wow…What’s the interest rate on that card? I own about $4000 right now and my interst is around $30. If you can get a laon rate lower than the credit card…Yes it would be a good idea
It’s a matter of changing your spending habits. So, you are basically creating a payment plan and sticking to it.