Heavily in credit card debt? Paying way too much on interest yet not enough on principal to ever get those cards paid off? Maybe you’re only able to make the minimum payments each month? Sound familiar? We might just have the answers you need.
While having credit cards can be a definite advantage when you need them, using them unwisely can easily turn credit card debt into a huge disadvantage fairly quickly, especially if you only pay the minimum payment every month. Interest rates can run anywhere from 10% all the way up to 40% or more, depending on your credit score, and they can change regularly, sometimes without notification. This can wreak havoc on your monthly budget, but even more importantly, it can nearly double the cost of the item that you originally purchased by the time you get it paid off. So, how do you get out of credit card debt if you can’t afford to pay the balances off right away?
Truthfully, one of the best options is to take out a personal loan and use the money to pay off your credit card balances. Personal loans typically have a lower interest rate than credit cards, and if your credit is good enough, you may not have to have collateral to back the loan. That means, you don’t have to refinance your house, you don’t have to take out a title loan on your car, and you don’t have to have a cosigner. It just means that you sign for the loan.
Plus, personal loans usually have anywhere from 12-60 month term limits, so you’ll have a set payment and you’ll know exactly when it will be paid off. (Unlike credit card companies, who typically lower the minimum payment over the course of time, guaranteeing it’ll take longer to pay it off, thus earning them more interest fees.)
Think a personal loan might be right for you? Check out our personal loan selection here.