Would it be a good idea to take out a personal loan to pay off high interest credit card debt?

Question

I think Im getting charged about 8.99% intrest on my credit card. What kind of interest would their be for a personal loan? Would that be worth it?

Answer 1

If the interest rate is lower than the credit card interest it could be ok. The problem would be if you kept the credit cards and ran up more debt where would you go then. Burn the credit cards

Answer 2

8.99% on a credit care is good, just make sure it is not on top of the "Prime" rate that moves up and down.

Aside from that, a bank will make you pay back a Personal Loan a lot faster than a credit card company will. You win by paying the amount off much earlier, thus saving on interest, but you have to start paying the full amount on the card each month (if you continue to use it), and be able to afford the Loan payments to make it worth while.

Answer 3

1

Answer 4

your interest from the loan (assuming you get it with all the credit card debt) will be much less. Its not a bad idea, but why 10k? get a loan for 6 thousand then immediately pay off your cards. The money that you are making should go to pay off the loan fast. A loan that is paid off is a good thing for your credit rating

Answer 5

You can approach your bank, or another lender about a low interest personal loan to pay off your credit card debt. If you have good credit, this shouldn't be a problem for you - but if you don't, do not saddle yourself with yet another high interest loan;
Consolidate your debt onto a single 0% interest or low interest credit card and then make double payments to ensure that you're paying down the principle of your credit card debt.

Focus on how and why you're living beyond your means. Taking out a loan is easy, but dealing with the real problem is not for most people. What most often happens in these situations is that the people get the loan, pay off most of their debts, and then find themselves in even deeper debt down the road. They never changed their spending habits. If you ever expect to get out from under credit card debt, you have to change your attitude and lifestyle. Set the credit cards aside, get set up on a budget, and deal with paying back your debts. Call the credit companies and work out payment arrangements. You'll be shocked at how much they will work and cooperate with you.

The road to financial recovery doesn't lead to getting new loans and borrowing your way into even more debt. It's about financial management and taking the path to a new financial future. One other word of caution if you take any kind of loan to pay off your credit cards: Once your credit card debt is paid off, you have to be vigilant about not running up your balance again, because you will still have big loan payments to make. If you're having chronic trouble paying off your credit card debt, it may be time to consult a debt counseling service for help managing your finances in the future.

Contact your creditors immediately if you’re having trouble making ends meet. Tell them why it’s difficult for you, and try to work out a modified payment plan that reduces your payments to a more manageable level. Don’t wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you. The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact.
For more information, see Fiscal Fitness: Choosing a Credit Counselor http://www.ftc.gov/credit

Answer 6

No. Do not try to borrow your way out of debt. The reason companies loan you money is to make money off you.

Instead, get serious about getting out of debt. Get with a written budget. Get another job if ya have to. If you are making car payments get rid of that car and get a paid-for clunker until you get back on your feet. you'd be suprise how fast you can get out of debt without car payments.

Meanwhile, surf the balance on this card to a new 0% interest credit card-that does not charge to transfer balances. Then pay that puppy off before it changes over to an interest credit card. After you transfer the balance cancel the first credit card. I get the idea that in the next 2-5 years people with alot of debt are going to be seriously screwed. Don't be one of them.

Answer 7

8.99% on a credit card isn't that bad, you'd probably get about the same on a personal loan, but it never hurts to ask so shop around and see if you can find a better rate, if you can go for it. It also depends on your outstanding balance, if you don't owe that much it might not be worth it.

Answer 8

Thats actually a good interest rate.

Loans typically are higher interest than a line of credit. I would talk to your bank about a line of credit first. (and you only pay interest on the part of line of credit that you use too)

Answer 9

i work in a bank and believe me if your annual rate is 8.99 i would stick with it you can only just get a high street bank loan for that internet loans are cheaper however they take into accoun your income plus your existing out goings so depends on that info really.

Answer 10

If you're getting 8.99%, then you're doing good. I would not suggest getting another loan to pay off that one unless you have very good self control and self discipline when it comes to your finances. some of my friends have done that with good intentions and ended up charging up those cards that they paid off.