Pros and Cons of Paying Off Your Credit Card with a Personal Loan
Paying off a high balance on credit card can be challenging. Credit cards usually have a rather high interest rate as well as a revolving term. When you review your credit card statement closely, you may see a section that tells you how long it will take to eliminate the outstanding balancing making only minimum payments. For many people with a high credit card balance, this timeline may extend for 10 or 20 years or longer. This can be discouraging, and you may easily feel as though you may never reach your financial goals with so much debt looming over your head. If you are looking for a better way to pay down your credit card balance and to ultimately eliminate this debt, you may be thinking about applying for a personal loan. You may even be able to consolidate multiple credit card balances through the use of a personal loan for added benefit. An unsecured personal loan through a credit union or your preferred bank may be used for this purpose, but you must meet the bank’s lending requirements. The actual loan terms, such as the interest rate and loan amount, are usually dependent on your personal factors. This may include your credit history, your verifiable income and other factors. Keep in mind that some banks and financial institutions have a lengthy and stressful loan process. Before you walk through this process, it is important to determine if the use of a personal loan for credit card debt reduction is a smart idea. A closer look at the pros and cons associated with using a personal loan for this purpose is in order.