The problem of having multiple credit cards is that it is hard to make on time repayment. If you find yourself behind in payment for one or more cards, getting a consolidation loan may help to solve your problem. When you approved for a debt consolidation loan, you will get funds to completely repay all your loans but you will then be subjected to make a fixed monthly payment to the creditor.
Most people took 2 – 5 years to repay the debt consolidation loans. The interest rate is usually fixed so you will be paying the same amount throughout the loan term. Usually, you can borrow up to $35,000 when you apply for a personal loan which you can use to pay back your credit card debt.
Once the lender approve your loan, you can expect to receive the funds in 1 – days. If you are looking to consolidate your loans with a personal loan, you should check with the lender about all the fees that you are supposed to pay.
Some of the fees that you may be charged for the personal loans are late payment fee, and origination fee. You must check with the lender how much you are supposed to pay every month so that you know whether it is more or lesser than the amount you are currently paying to your credit card company.
You can do some calculations to find out the total amount of interest you are paying currently so that you can perform comparison to the interest rate of the debt consolidation loan. Some lenders will offer a lower interest rate if you could find a cosigner.
Using a personal loan as a way of consolidate your credit card debts is a good alternative to 0% balance transfer card. It is suitable for people who are not confident that they can pay off their credit card debts by the time the promotional introductory period of the balance transfer credit card ends.
As a rule of thumb, you should search for a personal loans that offer an interest rate that is lower than the interest rate charged by your credit card company. This will help to reduce your burden and help you to settle the credit card debt faster.
Having the wisdom to make the right financial decisions is important. People who spend money as they want without any budget will often find themselves having a lot of financial problems. You must learn to live in modesty within your means and only spend on what you can afford. If possible, you should try to live as cheaply as possible so that you have more money for savings. Everyone has their own financial goal for example to buy a house or a car or a 50” LCD television or your child’s college education.
Regardless if your financial goal is big or small, you must know how to maintain a strict budget otherwise you will find that it is hard for you to save up to the amount that you want. In order to arrive at your goal, you must do some calculations on your expenses and see how much money you have leftover. You should determine yourself how much money you need to spend on your expenses and eliminate away those unnecessary expenses that you don’t need to spend.
To create a budget, you can use an excel sheet to list down the necessary items that you want to buy so that you can easily add up the cost and see how much is the total cost. From there, you can subtract the unnecessary expenses in order to make sure you meet the budget. By tracking your spending, you will be able to cap your spending and avoid spending all your income. Everytime you have leftover from your salary, you should deposit it into your savings account. Most people spend 50% of their salaries on basic necessities such as rental and food which leaves you with another 50% for savings.
Whenever you want to buy something, you must ask yourself whether buying it will affect the other expenses that you already have. For example, if you buy a new gadget, you will not be able to afford paying your room rental. You must find out the true cost of an item. For example, if you want to buy a car, you must not just take into account the cost of the car, but also the petrol cost, and maintenance cost. Doing so allows you to come up with a more accurate estimate on how much you have to spend when you buy the object.
Sometimes, it can be hard to control your spending habit. In this circumstances, you can create a visual reminder for example saving a photo of the things you want to buy on your phone. Whenever you feel that you are giving in into the temptation to buy, you can take a look at the photo so that it can help you to control your urge over spending unnecessary money.