Personal Loans Articles

Using Personal Loans to Do Away with Credit Card Debt

Credit card debt is like a runaway train. It just keeps on going until something stops it. In the case of credit card debt, that something has to be your determination to get out from under that heavy burden. While not charging any more debt to your cards might help, youíll need something more. What about a personal loan?

Credit card debt has become a given anymore rather than an option. Almost everyone uses credit cards to make purchases, pay bills, and buy groceries or gas. From consumers who are responsible but find themselves in a tight situation to those consumers who simply canít stop spending no matter what they try, credit card debt plagues many people. Trying to get rid of this debt is not as easy as some might think.

The Slippery Slope of Credit Card Debt

Once you begin to use your credit card, it is all too easy to continue to do so even beyond the limits of what your income will bear. This is when easy credit begins to get rocky and turns into debt problems.

While debt consolidation agencies are out there to help any consumer who believes he is in over his head, dealing with one isnít a pleasant prospect. It isnít that these companies are judgemental or mean. It is simply that the whole situation has a bit of unpleasantness about it that rather makes consumers with huge levels of debt feel like they need to grovel and apologize to anyone who offers to help- even if they are getting paid.

Depending on personal income situations and the level of debt, it usually takes more than a simple moratorium on impulse spending to do away with credit card debt. Finance fees keep piling up until the minimum payment begins to take on the appearance of a mortgage payment- large and expensive. This is where it really gets tricky because most consumers already have a large mortgage or rental payment. How are they going to be able to pay off all of this credit card debt and still keep their home?

Personal Loans to the Rescue

The first step is to find a way to pay off the debt that has accumulated on the credit card with the highest interest rates. Reducing the debt will also reduce the amount of interest that is charged on the account each month.

Fortunately, personal loans are available through a variety of lenders. Several benefits go along with the use of personal loans to pay off credit card debt. The first one is that the interest rates are generally much lower than the rates on credit card accounts. This fact will save the borrower lots of money over what he would have paid through the credit card company.

Secondly, the borrower will know what his payment will be each month since the payments are fixed. This allows him to budget the money, ensuring that he has it when the bill comes due. Plus, this payment should be lower than the total sum of minimum payments that the borrower was paying each month. It is vital to avoid adding any new debt to the credit card accounts while you are paying off the personal loan.