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.