Debt consolidation of high interest loans via personal advance loans is a feasible option if you can find a personal loan with a lower interest rate. You will have to compare the total that you will be paying back if you stick with paying back your lenders or sign up for the personal loans to consolidate these loans. If you don’t know how to do the calculation, you can ask someone experienced to help you calculate and see whether it is worthwhile to sign up for the personal loans.
The monthly payment may be reduced because of a lower interest rate or longer loan term. It is worthwhile to use a personal loan to consolidate your debt if you are having problem making repayment to multiple lenders on time. Consolidating your debt that you only have to make the repayment one time every month.
The advantage of personal loan debt consolidation is that you are forced to repaying the loan in a fixed term. Most personal loans have a loan term of 3 – 5 years. This means that you will clear off your debt if you continue to pay a fixed amount every month until the end of the 3 – 5 years loan term. With credit card, you will still be paying back the same card for the next 30 decades or so if you just make a minimum repayment every month.
The interest rate of the personal loan is fixed and won’t change unlike credit card interest rate. It is different than consolidating your debts into a credit card where you can take your time to pay off your debt. If you use a balance transfer card to consolidate your debt, you need to have discipline to pay off the amount prior to the zero percent introductory period.
Besides the interest rates, you must also take into account other fees like origination fees when determining whether it is worthwhile to sign up the personal loan. Those with good credit score will not have any problem in getting a low interest rate on the personal loan. If your credit score is average you may be expected to pay a higher interest rate. Some lenders will give you a lower interest if you can find someone with a good credit to become your cosigner.
When shopping for personal loans, you should choose one that does not charge a lot of different fees like origination and prepayment fees. It is important to do research and compare the APR rates of 3 – 4 personal loans to make sure you will end up applying the right personal loan You can check the estimated interest rate based on the loan amount you want to apply at the personal loan site.