It might be shocking to hear that the average American holds $90,460 in debt. Of course, this might go beyond just credit card debt and include things like auto loans too. When you think of your own debt does it make you cringe?
There is nothing quite so depressing as sitting down to pay your bills. You get your paycheck, pay bills where the balances never seem to go down and repeat in an endless cycle.
Is it worth it to get a personal loan to pay off debt? Are you ready to eliminate that debt from your life and looking for ways to make that happen? Wondering how to get out of debt?
A personal loan to consolidate your debt and get it paid off might be just what you need to get ahead of the debt curve. Read on to learn about the reasons to consider a personal loan to eliminate debt.
Better Interest Rates
The first thing to consider is the rate you are paying on your credit cards. Many credit cards carry exorbitant rates. If you can get a personal loan that has a lower interest rate, you can use the money to pay off the credit card debt.
The money you save in interest can be applied toward your balance allowing you to get things paid off more quickly.
If you have multiple credit cards it can be a hassle to keep track of due dates and payments. If you miss one or are late on a payment, it can impact your credit.
Getting a personal loan to pay off credit card debt means you have only one payment to make each month.
Credit Score Impact
To get a personal loan, a lender will do a hard check on your credit. This will have a short term negative impact on your score.
The good news is that over time, having a personal loan can actually improve your score. You are lowering your debt utilization by paying off credit cards, this is good for your credit. You are also using a different type of credit which in the long term is good for your credit score.
Personal Loans for Less Than Perfect Credit
If your credit score has taken a hit because of all of your credit card debt, you might be wondering if you can even get a personal loan. When looking for options know that there are lenders who will give a personal loan to someone who has less than perfect credit.
Don’t be afraid to shop around for rates on a personal loan, even with less than perfect credit. If the rate you get is lower than the rate on your credit cards, you’ll still be ahead.
Is It Worth It to Get a Personal Loan to Pay Off Debt?
Is it worth it to get a personal loan to pay off debt? The answer can be yes. You want to be sure you have your spending under control and not just run up the balances on the credit cards again.
A personal loan can give you a fresh start on your finances if you handle it responsibly.
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