Credit cards are one of the biggest obstacles most adults face to achieving financial freedom. While they can be useful tools, cards that are maxed out can lead to financial strain and negatively impact a person’s credit score. Instead of paying the minimum and feeling trapped by significant amounts of debt, many people are consolidating their credit cards into a signature loan. Individuals who are leery of using a signature loan for consolidating debt may not understand all of the benefits to this type of financial move. The following are just three of the most popular reasons to lump credit cards into one loan.
The average interest rate on a credit card is nearly 28 percent. This can make it almost impossible to pay them off, and monthly interest charges can quickly add up. A signature loan can help with credit card interest expense and allow a consumer to place all of their debt on one signature loan that can save hundreds of dollars over the course of a year.
Affordable Monthly Payments
Credit cards with high balances can come with significant minimum monthly payments. This can cause strain on a family budget and leave them in a stressful position should an emergency expense arise. Signature loans have a set monthly payment that is easy to plan for, and most borrowers can save hundreds of dollars on monthly payments when compared to only paying credit card minimums.
Scheduled Payoff Date
It can take three years to pay off a credit card balance of only $1,000. A signature loan will have a set date of when the loan will be satisfied. Making extra payments when possible can shorten the length of time, and most lenders do not assess a penalty for paying a loan off in advance. Rather than paying on credit card balances for years with no relief in sight, opt to pay a signature loan payment that will have a payment term of one to five years.
Anyone looking to take charge of their financial status and consolidate their debt should consider applying for a loan with King of Kash. They make it easy for people of all financial positions to get the relief they need from credit card debt. Be sure to read this site to learn more about the benefits of consolidating debt and achieving financial freedom.