Personal loans are a good option for many borrowers who have a goal of consolidating their debt. You can often use one personal loan to pay off the balances of multiple credit cards, other loans or even medical bills. Personal loans typically have lower interest rates than most credit cards, making them an interest-saving solution for debt consolidation as well.
Qualifying for a personal loan
Good credit history and proof of steady income will help you qualify for a personal loan from your credit union. If you’re trying to consolidate multiple debts into one personal loan, you will want to be sure you can qualify for enough to pay off all or most of the debt. Speak to your credit union representative or lender to learn the personal loan amount you qualify for. The maximum amount you can borrow may vary from lender to lender. Your credit score will also be a determining factor in the interest rate for which you qualify. Consolidating with a personal loan needs to be a savings to make sense. Either in the form of savings on total interest paid or in finding a monthly payment you can live with. If you are already struggling, one fixed, monthly payment may really be a plus for you. Just be sure before you borrow that you can make the monthly payment.
Save interest by consolidating debt with fixed interest personal loans
If you’ve found yourself in a vicious cycle of high-interest credit card debt or other high-interest debt and just can’t seem to get your head above water, a personal loan may be the solution. Personal loans typically have lower interest rates than many high-interest credit cards or high-interest loans. If you can save significantly on interest, then a personal loan may be the answer to your debt consolidation needs. Better yet, a fixed-rate, low-interest personal loan will also have a fixed term, keeping you on track to pay off your debt. It’s a great way to stay focused on your goal of paying off your debt without the temptation of just making a minimum credit card payment that barely covers the interest you owe.
Are personal loans a good answer for debt consolidation?
Still confused if a personal loan is the right answer for you. To sum it up, if you can find a personal loan that can help you pay off all or a significant portion of your debt, with a lower interest rate you can lock in, and you can afford the monthly payment, then it is a good answer for you. In conclusion, personal loans used for debt consolidation should be able to lower your interest rate and simplify multiple payments into one, fixed-interest monthly payment. Does this sound like what you’re looking for – one monthly low-interest payment you can focus on? Do you feel positive you can pay off your debt in the next five years? If so, a personal loan may be a good solution for you. Remember, a personal loan does not make your debt disappear. Rather, it’s a more effective way to manage your existing debt by transferring it over to a loan option that can save you on interest and make the payments easier to handle. The rest is up to you. To stay free of debt-related stress, you need to focus on keeping your debt under control. Commit yourself to refrain from taking on more debt until you achieve your goal of paying off the debt you currently have.
Apply for a personal loan at your credit union
You can apply for a personal loan online or in person at Benchmark Federal Credit Union. Visit us online and discover what Benchmark can do for you.