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Personal loan question
Posted on 3/25/25 at 7:27 am
Posted on 3/25/25 at 7:27 am
For the personal finance people would you suggest taking out a personal loan to get out of credit card debt? I am not that much in debt just might take me a year and a half to two years to pay off everything using snowball method
5
Posted on 3/25/25 at 7:34 am to Statsattack
When was the last time you charged anything to those cards?
Posted on 3/25/25 at 7:43 am to Statsattack
Do they still have cards that offer zero percent interest on balance transfers? My Mil opened a bunch of credit cards in my wife’s name when she turned 18 and charged a bunch of shite to them. My fil paid on them until he got sick so we took over the payments. This was probably 17 to 18 years ago but some we transferred to new cards with little to no interest.
Looks like there are a few that offer zero interest from 15 to 21 months. I’d go that route vs getting a loan. Find one that suits your needs and setup an auto payment to deduct and have it paid off early.
Looks like there are a few that offer zero interest from 15 to 21 months. I’d go that route vs getting a loan. Find one that suits your needs and setup an auto payment to deduct and have it paid off early.
This post was edited on 3/25/25 at 7:49 am
Posted on 3/25/25 at 7:45 am to Statsattack
Check out happy money and light stream
Only do this though if you plan on not doing the same thing that got you into it
Only do this though if you plan on not doing the same thing that got you into it
Posted on 3/25/25 at 8:22 am to Statsattack
Short answer is yes, because you “should” get a better rate. But, as others pointed out, if the situation or behavior that had you run up the bills is not behind you; there really is no point at this time because soon you’ll have a personal loan & new credit card bills.
If you are serious about the process, look at the credit cards that have 0% interest for 12-18 months. They will charge a flat 5% up front, but you can then make the payments for a year to knock the balance way down (if not out), and repeat if needed
If you are serious about the process, look at the credit cards that have 0% interest for 12-18 months. They will charge a flat 5% up front, but you can then make the payments for a year to knock the balance way down (if not out), and repeat if needed
Posted on 3/25/25 at 9:42 am to Statsattack
Wil save a lot more money with a balance transfer to a 0% card and a 3% transfer fee.
Plenty out there that will give you 15-21 months 0%.
Here's some options
Looks like the best option of those:
Citi Simplicity = 3% transfer fee and 0% for 21 months
1. Stop charging anything to C.C.'s
2. Get the balance transfer card
3. Transfer the balances to the balance transfer card, if say the balances total up to $10,000, expect to have the final balance be $10,300 you have to pay off (this is the $10k plus 3% transfer fee)
4. Setup up automatic payments where you take the total balance divided by 21 to come up with what you pay minimum each month to pay it off within the 21 months. Ex. $10,300 balance divided by 21 months = $491/mo.
5. Any time you have some leftover money each month after paying everything, pay the card off even further. This will get you ahead of paying it off in 21 months which will be good for your psyche. Doesnt matter if it's $20, $200 or you end u pwith an extrsa $2k one month, put it towards the card
Lastly, since you got into c.c. debt, it might be best to take a break from credit cards either for a while or permanently even after you pay this off if you dont trust yourself. In the end, some people can be c.c. people reap the rewards and never pay a cent in interest; and others will just continually get themselves into debt over them. If you believe you will be the latter, just stick with debit/cash.
Dont stretch this out over 3-4-5-6-7 years with a personal loan hanging over you. Be intentional, come up with a plan and pay these suckers off. You said yourself the balance isnt that bad, so already feels like you think you can do this. If you're really intentional you'll find yourself making some extra dough/income on the side once you see that balance really start to go down because you want that done even way before the 21 months are up and then you get hit with interest again.
Plenty out there that will give you 15-21 months 0%.
Here's some options
Looks like the best option of those:
Citi Simplicity = 3% transfer fee and 0% for 21 months
1. Stop charging anything to C.C.'s
2. Get the balance transfer card
3. Transfer the balances to the balance transfer card, if say the balances total up to $10,000, expect to have the final balance be $10,300 you have to pay off (this is the $10k plus 3% transfer fee)
4. Setup up automatic payments where you take the total balance divided by 21 to come up with what you pay minimum each month to pay it off within the 21 months. Ex. $10,300 balance divided by 21 months = $491/mo.
5. Any time you have some leftover money each month after paying everything, pay the card off even further. This will get you ahead of paying it off in 21 months which will be good for your psyche. Doesnt matter if it's $20, $200 or you end u pwith an extrsa $2k one month, put it towards the card
Lastly, since you got into c.c. debt, it might be best to take a break from credit cards either for a while or permanently even after you pay this off if you dont trust yourself. In the end, some people can be c.c. people reap the rewards and never pay a cent in interest; and others will just continually get themselves into debt over them. If you believe you will be the latter, just stick with debit/cash.
Dont stretch this out over 3-4-5-6-7 years with a personal loan hanging over you. Be intentional, come up with a plan and pay these suckers off. You said yourself the balance isnt that bad, so already feels like you think you can do this. If you're really intentional you'll find yourself making some extra dough/income on the side once you see that balance really start to go down because you want that done even way before the 21 months are up and then you get hit with interest again.
This post was edited on 3/25/25 at 9:50 am
Posted on 3/25/25 at 10:01 am to Rize
Zero interest balance transfer is the way. Just pay attention to the initial fees
Posted on 3/25/25 at 10:03 pm to thunderbird1100
quote:
Setup up automatic payments where you take the total balance divided by 21 to come up with what you pay minimum each month to pay it off within the 21 months. Ex. $10,300 balance divided by 21 months = $491/mo.
What’s your thoughts on doing this, but instead of making $491 payments monthly, pay the minimum each month and put the remaining into a HYSA (of course discipline is crucial here and you can’t touch that money) then pay off the entire loan at the end of the term. You end up recouping some of the 5% transfer fee.
Posted on 3/26/25 at 7:55 am to akimoto
quote:
What’s your thoughts on doing this, but instead of making $491 payments monthly, pay the minimum each month and put the remaining into a HYSA (of course discipline is crucial here and you can’t touch that money) then pay off the entire loan at the end of the term. You end up recouping some of the 5% transfer fee.
3% transfer fee with the one I posted, not 5%
This is a really bad idea though for someone trying to get out of credit card debt. They need to be throwing as much as they can every month to get rid of the debt, not trying to suddenly be an optimizer while still having the credit card debt. The extremely small spread difference is not worth the risk of someone who has had credit card debt seeing a big chunk of change building up on the side they can suddenly use one day instead of paying off the c.c. debt and the cycle just continues. Much easier for them psychologically to just pay off the debt as fast as possible throwing all they can at it.
Once its gone, sure, start building up the savings on the side, they will have money again, until then, no way would I tell someone to make minimum payments on transferred C.C. debt and and throw the rest in a savings account to make an extremely minimal (frankly not worth the huge risk) spread. Pay it off and get rid of it and dont tempt yourself. If they were optimizers they wouldnt be in this situation to start with.
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