Consolidating Debt with a Personal Loan
Paying off credit cards with a low-rate personal loan is a popular debt consolidation strategy.
A personal loan with a low, fixed interest rate could be the solution for an unwieldy set of credit card balances. It’s also a way to tackle other types of debt such as variable-rate student loans.
Realizing this savings involves consolidating your debt. This means moving it to a financial product with a lower interest rate. The money you receive from a personal loan can be used to pay off the balances of credit cards and other high-interest loans.
Personal loans can be used for a wide range of expenses, from medical bills to adoption fees. In other words, they’re also a good way to prevent a substantial credit card balance. If your personal loan’s interest rate is lower than your credit card’s, you’re likely to save money. And if its rate is fixed, you can calculate your monthly payments and work them into your budget.