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    Personal Loan

    I have been a long time reader of this forum but forgot my old username and password so just registered a new one.

    Anyway, I know how everyone feels about personal loans and debt consolidation loans but I wanted to put this out there.

    I recently was approved for a loan for $25,000 at 15% interest to pay off my credit cards. Yes, I know, that's an awful lot of debt on plastic. Most of my cards are between 18-21% interest. The payment would be $850 for 36 months. I am currently paying $600 a month, and some months I add another $500 to one specific card. So the payment can be made, and it gets me out of the CC debt in 3 years. Versus God knows how long with the high interest minimum payments on the others. Thoughts?

    #2
    Originally posted by zim27 View Post
    I recently was approved for a loan for $25,000 at 15% interest to pay off my credit cards.
    Most of my cards are between 18-21% interest.
    The payment would be $850 for 36 months
    I am currently paying $600 a month
    1. 15% is better than 18-21%.
    2. If you can afford to pay $850/month, why are you only paying $600/month currently?
    3. Have you stopped using credit cards 100%?
    4. What is the source of the debt? What did you buy for $25,000? Do you have anything you can sell or return to lessen the debt load?

    Keep in mind that if you keep the debt on the credit cards, as the balance goes down, the minimum payment goes down, but once you consolidate it to the personal loan, you are locked into that $850 payment until the debt is gone. It's a lot easier to get into trouble if you have a tight month.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #3
      How is your credit? If it's 740+, you could potentially apply for any of the various cards out there offering balance transfers for 0%-10% for 1-2 years. By cutting your interest payments, you can speed up your payoff significantly.

      Who is the personal loan from? National bank, or a local/regional credit union? 15% is still pretty high for a debt consolidation loan... With some looking around, I'd bet you can find a better option than 15%. As a quick example, I use USAA & PenFed CU for most of my banking/loan needs. USAA is offering a $25k personal loan at 9% for 36 months, Penfed is offering a 10% debt consolidation loan up to $25k for 36 months. What I'm trying to say is shop around -- there are plenty of options when it comes to finding personal loans.

      Either of those options would be my recommendation, whichever you're more comfortable with pursuing.
      "Praestantia per minutus" ... "Acta non verba"

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