Consolidating credit card debt resources dating minors in arizona
The first, debt consolidation, usually requires getting a loan that can be used to pay off high-interest credit card debt.
The loan can be a secured, for instance a home equity loan or line of credit, or unsecured, a personal loan that a borrower can obtain from a bank, a credit union or an online lender.
But if you pay no interest for a year, you could focus on paying down the principal and avoid interest payments in the future.
If you can’t get a 0% interest promotion, consider transferring your balances to the card you currently have that charges the least interest.
Sometimes one of the cards you now use will offer interest free periods on balance transfers as a promotion.
If that isn’t available, shop around for a card that offers a no-interest introductory rate as an incentive.
You also need to know the annual percentage rate, the time you have to repay the loan and what the monthly payment will be.
Most no-interest balance transfer offers are limited to 12-18 months.
Here are points to consider before seeking a consolidation loan.
Lower, fixed interest rates and an extended repayment period are the big pluses.
Since credit card interest is imposed on the current unpaid balance every month, payments can be high, especially at interest rates that often exceed 20% or 25%.
Annual interest rate on a home equity loan can be significantly lower, often in the 5%-8% range, and each month you repay both principal and interest until the loan is repaid.