Credit cards have become a way of purchasing today. We all use credit cards to buy now and pay later. When credit card debt begins to pile up, it might be better to pay off the credit card debt with a personal loan. Here are four reasons to get a personal loan to pay off credit card debt.
1. Hitting the Brakes
The first reason you might use a personal loan to pay off credit card debt is to take control of what you owe. If you are unable to pay off your credit card(s) balance, the interest on your cards can grow rapidly. You might only be paying interest rather than the amount that you owe. You can grab the reigns and control the interest on your credit card by using a personal loan.
2. Lower Interest Rate
Credit cards offer you a revolving line of credit, which means that you have an set and accessible limit amount. Because of this, credit card companies will charge a higher rate of interest. A personal loan designates set payments, which you will pay over 3 to 5 years. This means that you will have a lower interest rate on your personal loan.
3. Set Terms and Fixed Payments
When you have a personal loan, the terms are set. You know exactly how long it will take you to pay off your loan. This is usually 3 to 5 years, but can vary depending on your needs and ability to borrow, etc. You will also have a fixed payment. This means that you will know exactly how much you will pay each month until you pay your loan off. You won’t have to worry about trying to cover the interest rate charges or watch them grow out of proportion. You agree on the interest rate in the terms of the personal loan.
4. Create new budget and spending habits
Finally, when you use a personal loan to pay off credit card debt, you can start anew. Once you move your credit card debt to a personal loan, you create new spending habits. With this new control, you don’t have to rely on credit cards to meet your daily needs. A personal banker will help you establish new habits, and gain control of your spending.
A personal loan can simplify your credit card debt. You’ll often save money with a new, lower interest rate. You can start to create a new way of budgeting and spending. With a set payment schedule, you can start to create a new way of budgeting and spending. Chelsea State Bank offers free personal loan assessments as well. Talk with your banker about a personal loan and begin your journey to financial freedom.