Turning To An Installment Loan For Credit Card Payoffs
Consolidating your credit card balances is one way to move towards a life free and clear of credit card debt. Taking out an installment loan is an option for consumers who want to get a handle on those high credit balances. Although credit cards can be a positive force in ones financial life, they can also be a negative when purchases get out of control and you find yourself upside down on your limits while trying to figure out how you are going to dig yourself out of debt.
Credit cards generally carry high interest rates so by consolidating your balances with an installment loan, you can get an overall lower rate for the total amount you owe. You can save yourself money by transferring multiple balances to an installment loan that carries a lower interest rate. With that, you have the opportunity to pay off your installment loan faster with a payment plan that helps see you through your goal of becoming credit card debt free. Because credit card companies don't require that you payoff your balance by a certain date, it can take years, along with thousands of dollars, to pay off what you owe.
With an installment loan you have the option of making payments greater than what the lender requires, which means you will pay off your loan faster and with less interest (this is called "amortization"). Not to mention, you only have to make one payment, to one lender, versus several payments to several lenders.
As convenient as this sounds, this scenario may not be for everyone. Before you opt for an installment loan for the sake of paying off your credit cards, make sure this is a financially beneficial move for you and your bank account. Work the numbers to compare what you owe on your credit cards as well as how much you are paying in interest. Then, figure out how long it will take you to pay off your installment loan and how much you will pay interest when all is said and done.
Don't forget to consider how much your loan payment will be and how that will factor into your monthly expenses. Your payment may even be higher than the total of what you are collectively paying now with all of your credit cards being that you will have a set amount of time to payoff your loan. In this case, you may not save yourself any money on a monthly basis but you will get those credit card balances paid off and be clear once and for all of that debt.
As with any loan or type of credit you choose to take out, shop around. Look at several different lenders, online and in-store to compare interest rates, loan fees, and payoff terms. Payday lenders, banks and credit unions in Las Vegas offer installment loans. Don't judge a lender by their name or size, do your research and get educated on the process. If it doesn't seem like the right option for you, stick with paying off your credit cards. Focus on paying down the one with the highest interest rate first. Be sure to make your payments on time and always pay extra if you can!
About the Author
LoanEX offers fast payday loans when you need quick cash. Visit http://www.loanexfastcash.com for more information on how to obtain a short-term online payday loan.
Tell others about
this page:
Comments? Questions? Email Here