As anyone with credit card debt can tell you, the stress of this kind of debt can really take a toll on you after a while. That’s especially true when you have a particularly high amount of debt or debt on a lot of credit cards. Many average Americans find themselves in over their heads in debt every year for just this reason.
Despite this fact, few people know most options that are available to help them. Many people only discover ways to pay down debt through a cursory Google search. That’s how many discover personal loans as a debt relief option. While technically taking out a personal loan is not going to eliminate any debt, it does consolidate your debt into one, often more manageable payment. For some people, the rate is actually lower than the ones available on credit cards. In the right situations, this can be a much-needed form of debt relief.
When to Consider Other Options Besides Personal Loans To Pay Off Credit Cards
While there are benefits to considering a personal loan to pay off credit cards, personal loans are not necessarily a good option for everyone. They do not eliminate your debt, nor should they be considered a “quick fix” option. It is important to weigh your options carefully before deciding.
Although there may be many situations when personal loans could be a good solution for your credit card debt, there are some times when they will definitely not be your best option. If you face one of the four following situations, you may want to strongly consider alternative options.
- You are already struggling to pay the minimum payments on your credit cards. Though you may get better interest rates on a personal loan, this does not usually translate to lower payments, because personal loans usually have much shorter payoff terms. If you already cannot handle the payments, a personal loan may actually cause more, not less stress.
- You can’t get better terms with a personal loan. Not everyone has good enough credit to get lower rates on a personal loan. Even fewer people actually lower their monthly payments. Other than making the payments simpler to remember, there may not be any tangible benefits of a personal loan consolidation. In these cases, it is best to look for more advantageous options.
- You are simply moving the problem to be dealt with later, not dealing with it. No matter how many times you consolidate or move around your debt, it is not going to go away simply by ignoring it. It is important to face up to the reality of your financial situation. A personal loan is only a good option as a part of a larger debt elimination plan.
- You have better, long-term options. If you are certain that you can pay off your debt in under a year, you may have zero-interest balance transfer options. Alternatively, if you are facing an overwhelming amount of unsecured debt, bankruptcy may be a better option long-term, so you can have a fresh start.
If you are still confused about your financial options, you aren’t alone. There are so many options for overburdened consumers that it can be difficult to know where to look. If you are drowning in debt and not sure how you can ever pay off credit cards, call the Cleveland bankruptcy lawyers at Luftman, Heck, & Associates today at (216) 586-6600 for a free consultation. We will be happy to present you with all your options, including personal loans, so that you can choose the right one for you.