What to Know About Taking Out Loans to Pay Off Credit Card Debts – Is it the Right Choice?

February 27, 2020

Many people are stuck in a cycle of living from paycheck-to-paycheck. Credit cards offer a quick and excellent solution that can help people pay for necessities and earn points on the spot, but it’s a slippery slope that steers many victims into spending more than they can afford. 

In fact, 41.2% of American households alone have a credit card debt of over $1 trillion, according to the Federal Reserve. If you’re one of the many credit card users who are struggling with a pile of balances that seem virtually impossible to pay off, 

When accidents and other unforeseen events happen in between, it can push people to digger a deeper hole with their debts. If you’re in a bind, considering taking on a personal loan for debt consolidation makes sense. Before you move forward, be sure to read your homework to avoid any pitfalls that can burn larger holes in your wallet. 

When a Personal Loan Makes Sense as a Possible Solution

Taking on a personal loan doesn’t necessarily mean you’re swapping one form of debt for another. On the contrary, personal loans offer considerable benefits for those who can still qualify for the requirements, especially during the following circumstances:

Approve a Loan for a Lower Interest Rate

Personal loans typically come with a standard annual percentage rate (APR) of 5.99%, making it relatively lower than the interest rate of an average credit card. If you have a credit score of 670 or higher, which is generally considered as an average score, you can qualify for a loan without worrying about high-interest rates clashing with your due payments. 

How Can A Personal Loan Help Pay Off Credit Card Debts? 

Creating a financial plan that organizes your debt repayment timeline can be confusing, especially if you’re switching between different credit cards with their set of varying payments and APRs. 

Taking out a personal loan simplifies the process as it allows you to shell out under one payment to multiple depts in one month, with a high chance of getting a lower APR in the process. 

Personal Loans Allow You to Secure a Lower Monthly Payment 

Paying off credit card debts often feels like trying to break free from a money pit; it’s a quicksand-like process that often drags you down further as you spend more on payments than your income. 

Fortunately, personal loans can solve the problem as it allows you to borrow money with a much lower APR. Not o mention, you can also select the appropriate amount and schedule that suits your needs and circumstances. Of course, you will need to use a debt consolidation calculator to determine your monthly payment and designated timeline. 

The Bottom Line: Personal Loans Let You Know When You’ll Finally Pay Off All Debts

Having credit card debts can pose a serious problem that may end up in an expensive cycle. You need your credit cards to pay off what you owe, which forces you to collect more depths. Personal loans come in handy during these situations as it allows you to borrow money with a fixed interest rate, monthly payment, and repayment schedule. 

If you’re looking to take out a personal loan in South Africa, Hoopla Loans is your best option. Get in touch with us today to see how we can help.