Short term loans can be used for the purpose of restructuring credit card debt. You have to find a short term loan that charges a lower interest rate compared to your credit card interest rates. A personal loan can give you the option of choosing your loan term as you can afford it in your budget.
Lower interest rates means the monthly payment will also be cheaper. With the lower monthly payment, you will find that it is more manageable for you to pay back the credit card debt. The lower interest fees will decrease the expense of interest that you will be spending on paying off your debt. The average credit card interest rate is 13% and you can get a lower interest rate through a personal loans.
It is easier to pay off a personal loan because it has a defined period of loan term. You have to pay a fixed amount that include the principal and interest fee. Most personal loans can be cleared up within 4 – 5 years. Consolidating your credit card debt on a personal loan can help you to save thousands of dollars in interest rates.
Credit card does not have a defined loan term because you just keep paying until all the debt is cleared. In credit card, you can make a minimum repayment where you only make payment for the interest fees. As a result, your balance will roll from month to month and this can end up you taking 10 years of more to repay your debt.
You will see an improvement in your credit score as you make payment for the personal loans. Your credit score will increase because of the reduced credit utilization. Usually the loan companies will carry out soft and hard pulls when you submit a loan request application.
Soft pulls won’t affect your credit score. Even though hard pulls can affect the credit score, it is very rarely that it will deduct a large amount of credit score.
Restructuring the credit card debt with personal loans is feasible if the total minimum payments you make on the credit card is higher than the total you have to pay for the personal loan. You can easily apply for a personal by submitting an online loan application.
Normally, you can expect to get the funds for the personal loans in between 1-5 days. Personal loans is a type of unsecured loans just like credit card. So, you are not required to put your asset as a type of collateral. you can use the online loan comparison sites to compare the different loans. You should take into account fees like teaser fees and origination fees when applying for a personal loan.