Consolidating credit card debt impact credit score
If you have a large credit card balance, moving it to a credit card consolidation loan you have to pay off in just a few years might break your budget.
For example, if you moved ,000 in debt to a three-year personal loan with a 12.00% APR, your monthly payment would be 8.
Keep in mind that there’s no guarantee your interest rate will be lower on a personal loan. Moving debt from multiple credit cards to one credit card consolidation loan can simplify your debt payoff.
For example, you won’t have to worry about various payment dates and amounts.
Compare rates by personal loan companies like So Fi, Citizens Bank, and Upstart to see how they stack up.
household has ,662 in credit card debt and ,172 in student loan debt. But despite the lower average balance, credit cards might pose a greater threat to your financial well-being than student loans.The idea is to get a credit card consolidation loan with a lower interest rate than what you’re paying on your credit card as well as a set repayment period. For example, let’s say you have a ,000 balance on your credit card with an 18.00% APR.If you qualified for a three-year personal loan with 12.00% APR, your monthly payment would be 3, and you’d pay 3 in total interest over the life of the loan.That’s mostly because credit cards don’t have a set repayment period.In fact, if your balance is high enough, you could never get out of debt by paying just the minimum payment.