Consolidating credit card debt into a loan
Once the introductory period expires, the rate on a balance transfer card is usually higher than on a personal loan.In addition to paying off your balance before the rate increases, you’ll want to avoid making further charges.A higher score will qualify you for more loan opportunities, lower interest rates and better loan terms in the future. Several personal finance websites, including Nerd Wallet, offer a free credit score.Look for a site the offers educational tools such as a credit score simulator plus access to your credit report.
If you can’t qualify for a loan through a reputable lender, don’t head for a payday lender. For borrowers with good credit, a balance transfer credit card is an alternative to a debt consolidation loan.Borrowers with excellent credit and low debt-to-income ratios may qualify for interest rates at the low end of lenders’ ranges.Someone with poor or average credit may be able to get an unsecured personal loan on the strength of a steady income and low debt levels, but should expect rates toward the higher end of the range — up to 36%.Debt consolidation loans allow borrowers to roll multiple debts into a single new one with fixed monthly payments and, ideally, a lower interest rate.Compare loans for debt consolidation and learn about your options for consolidating debt.