Should You Use Personal Loans to Pay a Credit Card Debt?
Personal Loans can be your safest option when you have accumulated considerable debt or when you need to make a big investment. Personal loans are simple, convenient and you won’t need to cite a reason for your borrowing. You can use it for just about anything like home renovations, your education, a wedding, a vacation, or anything else you can imagine. It needs to be mentioned though that you are expected to be cautious when you take a personal loan because if you fail to pay back your debt, financial problems can worsen.
Personal Loans – What You Need to Know
Although payday loans, home loans, cash advances, lines of credit, auto loans and long-term installment loans are all personal in nature, personal loans are generally used to describe term loans which have a long time horizon for repaying the debt. They feature installments that are usually small and the rate of interest is moderate. These loans are also very convenient, customizable and are quickly approved. Money is usually credited to your account within a matter of hours.
Personal installment loans are also predictable and easy to manage because you pay in small installments. You also don’t need to put up any collateral like a highly valuable asset and risk losing it. This keeps you stress-free. Most personal long-term loan borrowers are well protected in Canada by various laws and the chances of fraud or cheating is much less than in payday loans or other online short-term loans. Due to long term, lenders and their clients get a chance to form a strong strategic relationship that benefits both parties and clients continue to get many incentives for good payment track record and referrals.
Cashco Financial is the Best Loan Provider for You
Cashco Financial has a major presence in BC, Alberta, Saskatchewan, and Ontario, Canada and we are still expanding. We operate over 65 locations in Canada and over our headquarters in Edmonton, Alberta. Cashso is a lender that deals in payday loans, auto loans, pre-settlement funding loans and flex loans which is our mid to long-term installment loan. We are proud to be a leader in online lending and one of the most trusted and respected lenders in the country.
How to Pay off Credit Card Debt
If you have amassed a debt through non-payment and delinquency of your credit card bills, it would definitely put you in a stressful situation and you will need to look for ways to escape the burden before a legal action is initiated or some drastic step is taken by your credit card company or bank.
Paying off credit card debt with personal loan could be an option if you consider the following:
- Lower your interest: Non-payment of credit cards would lead to maxing out your credit cards. This would not only attract heavy penalties but also make you pay off your debt at very high rates of interest. If you take a personal loan to pay off your credit card, you could save a lot of interest payments. You will also get some more time to service your total debt. Under normal situations, the rate of interest on a personal loan can be lower than that on credit cards.
- Pay smarter each month: Personal installment loans usually have small installments. At Cashco, our flex loans allow you to usually make a weekly, bi-weekly or monthly payments. This could be a better option at a time when you are struggling under the debt burden and your financial stress is growing. Paying a little more in interest is sensible and fair in the light of your inability to settle your credit card debt or other debts and risk attracting a huge fine.
- Slowly repair the dents on your credit score: Non-payment of credit card bills and other debts using a personal loan like a Cashco Flex Loan, your credit score can be protected and every timely payment would lead to an improvement in your credit score.
- Prepayment would mean lower interest and better credit score: Not all lenders allow prepayment of a loan. Some charge a fine. You should choose those which don’t. Cashco allows you to pay off your flex loan early without penalty. If you use a personal loan to pay off your credit card and later on you are able to pay off your loan before the term is over, you can save a lot fo money that would have paid in interest.
- Fixed payment: A personal installment loan would also mean that you have a fixed monthly payment to make which is predictable and easy to manage.
If you want to use personal loans to pay off credit cards, you have to make sure that you choose the right loan. Go through the documents and websites carefully and study the terms and conditions. Choose something like Cashco’s Flex Loan, which has a minimal rate of interest and you would not only protect your credit score but also save yourself the harassment from your credit card issuer.