Should You Take Out a Personal Loan to Consolidate Credit Card Debt?

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Did you know that the average American is walking around with almost $6,000 in credit card debt? And did you also know that it could take a person about 30 years to pay off that kind of debt if they only commit to making minimum payments on it every month?

If you’ve racked up that much credit card debt (or more!) in recent years, you’re likely feeling beyond frustrated when you think about trying to pay it off. But there might be a simple solution for you: You can take out a personal loan to consolidate credit card debt if you want.

There are so many great advantages that come along with using a personal loan for credit card consolidation. Let’s take a look at why it might be a great option for you if you’ve gotten yourself in over your head in credit card debt.

Makes Credit Card Debt More Manageable

One of the reasons why so many Americans have credit card debt is because most people carry around more than one credit card at a time.

On average, Americans have 2.6 credit cards each. And that number jumps all the way up to 3.7 credit cards when you take all of the people who don’t have any credit cards at all out of the equation.

When you have credit card debt stretched across several different credit cards, it can make it hard to manage. Each card comes with its own interest rate and minimum monthly payment, which can make it tough for people to find the best way to pay their debt down.

The best personal loans will eliminate this problem by making it a whole lot easier for you to manage your credit card debt. Instead of worrying about how much you owe to a bunch of different creditors, the only thing you’ll need to worry about is how much you owe on a single personal loan.

That alone will lift some of the weight that you feel off your shoulders. You’ll feel more hopeful about paying off your credit card debt when you can see all your debt lumped into one pile as opposed to being spread out all over the place.

Provides a Lower Interest Rate

Another reason why Americans have so much credit card debt is because of the high-interest rates that come attached to most of today’s credit cards. It’s not uncommon for cards to come with interest rates that sit anywhere from 15 percent all the way up to 30 percent.

When interest rates are that high, it’s almost impossible for people to put a dent into their debt. Every time they make a payment—even one that wipes out a decent amount of their debt—a high-interest rate will send the debt shooting right back up again.

Personal loans often come with interest rates that are much lower than the ones that come with credit cards. The lower interest rates allow people to pay down credit card debt quicker than they would be able to otherwise.

Gives You a Clear Debt Payoff Plan

When you’re in the process of trying to pay down credit card debt, you’re in charge of creating a payoff plan. More importantly, you’re in charge of sticking to that payoff plan, even during the tough months when you have other unexpected bills that pop up.

Trying to stick to a payoff plan on your own can be tricky, especially if you don’t have the best self-discipline. Taking out a personal loan to pay down your debt will help out in this department.

When you apply for a personal loan, a lender will set you up with a payoff plan that will let you know exactly when your debt will be all the way down to $0. This will keep you motivated as you pay off your debt and make it easy to keep track of where you stand along the way.

Increases Your Credit Score

Has all the credit card debt that you’ve accumulated taken a toll on your credit score? When you have too much credit card debt in your name, it can drag your credit score down and make it hard for you to take out a mortgage or get an auto loan.

You can bring your credit score back up almost instantly when you put personal loans to good use. By paying off your credit card debt, you’ll bring your credit utilization way down, which will make you look like a more attractive borrower to other creditors.

This does not mean that you should run right back and rack up a bunch of credit card debt again. You should instead focus on paying back your personal loan before you start taking out other loans.

But if nothing else, increasing your credit score will show you just how beneficial personal loans can be from the moment you take one out. It’ll help your credit score right away and put you on the right financial path.

Changes the Way You Think About Debt

Debt has become a way of life for many Americans. If they can’t afford to buy something, they stick it on one of their credit cards and tell themselves that they’ll worry about it later.

Thinking this way can get you caught up in a vicious cycle. It won’t be long before you’re in too deep in debt with no way out.

Paying off debt with a personal loan will force you to reevaluate the way that you look at debt. You’ll be less inclined to rack up debt when you know how hard you need to work to get out of it.

Take Out a Personal Loan to Consolidate Credit Card Debt Today

Are you stressed out all the time because of credit card debt? You don’t have to live like this anymore!

When you take out a personal loan to consolidate credit card debt, it’ll lower your stress levels and show you that there is hope as far as paying off your credit card debt is concerned. It won’t be long before you’re debt-free and in a much better place.

Read our blog for more tips on setting your finances straight in 2019.

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