Updated: written April 27, 2016
Having a lot of debt can begin to take its toll, and you might start to wonder if there are better ways to handle it. The amount of debt you have and whether from a single source or distributed are two factors that go into the decision of a plan of attack. Regardless, the ultimate goal should be to pay off your debt as quickly as possible. Debt can negatively affect your credit, which in turn has a negative impact on many other areas of your life. Fortunately, it is quite possible to get out of debt with a little planning and smart spending on your side.
You can save money in the long term
It is true that there is no fast track to debt, but it is possible to make the test easier. Pay multiple lenders simultaneously can bog you in interest charges. Even if you only have one source of debt, high interest rates can make you feel like treading water rather than swim to shore. If your monthly payments you are not going anywhere, it's time to look at other options. There are two methods for consolidating and managing your debt can save you money in the long term: balance transfers and personal loans . Which one is right for you? We broke the advantages of each method to help you decide.
Balance Transfers
What is a balance transfer? A transfer credit card balance can be a great tool for managing your debt. Whether you're juggling multiple credit cards with a balance of both, or have a simple card with exorbitant interest rates, a transfer can help make things easier. How balance transfers work is simple. After applying and being approved for a new credit card, you let the company know that you want to do a balance transfer. Most card companies will guide you through the process if necessary, and some even allow you to complete the online process.
What type of credit card do I look? The purpose of a balance transfer is to reduce your interest that the most of your monthly payments are going to repay your balance rather than interest payments. To do this, you need to find a card that has a low APR current or 0% introductory April Keep in mind, if you have a large amount of debt to repay, the period of 12 18 months 0% Intro APR offered by some cards might not cut it. In this case, you'll want to focus on the search for a low APR underway to not have to worry about a sudden rise in interest when the introductory period ends.
Which cards are best for a balance transfer? With so many credit card options, it can be overwhelming to find the best credit card for a balance transfer. To help relieve stress, we decomposed the first four cards for balance transfers.
Chase Slate is our first choice for a balance transfer, as it offers the combination of an introductory APR of 0% for 15 months and no transfer fee balance. As you finish your balance transfer in the first 60 days of opening your Chase Slate account, you will not have to pay the balance transfer fee, which usually costs more than $ 5 or 5% of the balance transferred. This card is also a great choice for someone with not so perfect credit because, unlike the maps below, this card requires "good" credit instead of "excellent."
Looking for a balance transfer card, without most of the costs? Citi Simplicity (a NextAdvisor seller) not only offers an incredible 18 months 0% Intro APR, but it also has no late fees or annual fees. However, there are balance transfer fee is $ 5 or 3% of the amount of each transfer, whichever is greater.
Maybe you want to earn money back on your balance transfer. The Discover Card is also a 18 months 0% Intro April and 5% cash back on purchases in certain categories and 1% cash back on all other purchases. Discover invoice transfer fee of 3% for balance transfers.
Ring With Barclaycard MasterCard you will not pay a balance transfer fee - ever! Although the Barclaycard Ring MasterCard does not offer a 0% introductory April as the above detailed maps, it offers low ongoing APR 8.0% variable on purchases and transfers, so it's a great card have if you transfer a heavy balance (which you may not be able to pay in 18 months).
What are the drawbacks of a balance transfer? As noted above, some credit cards charge balance transfer fees, which is usually 3% of the total balance, but can sometimes be as high as 10%. You also know how a high credit limit will be served until you are approved for a card. In addition, you can transfer balances from other credit cards to a new balance transfer card, so if your debt is not a credit card, balance transfer is not possible.
personal loans
What is a personal loan? Personal loans are loans that can be obtained for a multitude of uses, including debt consolidation, with little paperwork and a fast approval process. These loans are unsecured, which means you do not have to put up your home or car as collateral. The great advantage of these loans is that they are fixed rate loans, which means that the interest rate that you start with is the interest rate that you are done with.
How a personal loan help with debt? These loans are perfect for consolidating your debt. If you have an unpaid medical bill and two outstanding balances of credit cards, you can take a personal loan, pay off your debts and be left with only one monthly payment to make. The rates offered by the personal loan services are often lower than the average rate for a traditional loan, and sometimes even lower than credit card rates.
What services are best for personal loans? personal loan services are as varied as the people who need to use them, which means that no matter what, there is probably a service for you. That said, here are a few of our favorite personal loan services
If you are looking quite different from the traditional lending experience something, Club loan is an excellent choice. It is a peer-to-peer lending service works by connecting potential borrowers with individuals and companies that want to lend money as a type of investment. Club loan application process is simple and personalized service and offer amazingly low interest rates - between 6.78% - 29.99% APR - with a maximum loan amount of $ 35,000. The best part of loans Peer? If you do not receive the amount you requested in full the first time, you can try again.
Another loan service peer-to-peer, Prosper offers low interest rates (6.73% of - 35.36% APR) and EUR maximum loan of $ 35,000. Prosper The application process is very personalized, and this service is ideal for those who have good credit / average or better.
Springleaf offers personal loans up to $ 25,000 with interest rates ranging from 16% - 40% APR Service is an excellent choice for those who could not not have the best credit, and it has branches in brick and mortar in many places across the country so that you can benefit from a customer service face-to-face, if desired.
What are the disadvantages to a personal loan? Depending on the quality of your credit is, you can not be approved for the full amount you have to borrow to consolidate your debt. Some personal lending services approve those with average or even poor credit for a loan, but if you have a significant amount of debt, you may not be able to pay it off with a single loan.
Which is better to pay off debt?
Ultimately, much depends on this type of debt you have first. If your debt is limited to credit cards, balance transfer might be the best option. However, if you have a debt from a variety of sources, a personal loan will be a more suitable option for you to consolidate all your debt to one monthly payment.
Overall, the most important thing is to repay the debt in as little time as possible without paying a fortune in interest along the way. For more on balance transfers or personal loans, visit our review pages for both services.
Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and has not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but the terms and conditions of card can change at any time. This site may be compensated by the sending credit card affiliate program.