How to Use a Personal Loan to Consolidate Credit Card Debt
A quick cash personal loan is a specific sum of money that has no attached security and is to be repaid in installments over a given period of time; this could be in days, months or years, depending on the "quick cash loans" agreement signed. It is known to be an unsecured loan because the entire process requires no collateral. Since personal quick loans are unsecured loans paid in installments, they are easier to obtain and often serve as a means of consolidating credit card debt. If you have multiple credit cards that are paid throughout the month and carry high interest rates - personal quick loans with a credit check are a viable option to make them more manageable.
Obtaining a Personal Loan
Before a person can obtain a personal loan, he/she must possess a reasonable credit score that will qualify him/her to apply. This comes as a result of the lack of securities associated with applying for and obtaining personal loans. In short, possessing a reasonable credit score implies that you responsibly use your available credit, paying it on time and not using it in excessive amounts. Typically any credit usage that exceeds 30% of your credit line is considered excessive in the eyes of the lender. Understanding your credit, its usage and the history will help you understand how lenders will view your application.
The interest rates for personal loans may be fixed or variable, depending on your credit score, credit history and income. They also depend on the lender providing the loan. The interest rate is something to take into consideration, as it will determine whether you will be saving money or not by consolidating your credit card debt into this loan.
Consolidating Credit Card Debt
A personal loan can be obtained from a reputable credit union, local bank or a credible online lender and provides the means to consolidate credit card debt easily. As earlier mentioned, having an excellent or good credit score is mandatory to make this process a profitable venture. Your credit score is one of the determining factors for the interest rates charged on your personal loan. Normally, personal loan lenders will have to review your credit score and income for the past two years. They will also check your debt-to-income ratio to see if you qualify for a loan; this compares your outstanding debts to the amount of income you bring in on a monthly basis. If your debt-to-income ratio is too high, a loan will not be granted.
Upon approval, debts accrued from credit cards can be paid off with the money obtained from the loan. By so doing, you are consolidating credit card debt. With this (personal loan), loan payments can be made only once monthly thereby, reducing the stress of making multiple payments with several credit cards and paying various interest rates to different companies. This allows you to save on interest costs and ensures that you pay the loans off faster. Once you are able to obtain the personal loan and consolidate your credit card debt and quick loans online, it is important that you make your payments on time to make your efforts worthwhile. The process of obtaining the personal loan was meant to alleviate your financial burden, while allowing you to pay down credit card debt that would otherwise seem rather impossible to ever get paid down