Consolidation service credit card consolidating debt
So you might have better luck getting your loan funded with a P2P lender than with traditional financial institution.Like always, you’ll need to perform a rate comparison to see if it’s worth paying off your credit cards with a debt consolidation loan.
This can affect your credit score during the repayment period because of your low credit utilization ratio.On the flip side, you’ll be paying interest for longer a period.But if you can get a low rate and avoid going into default, the longer term might be an advantage for you.And just like a regular bank, your interest rate is determined on your perceived risk to repay the loan, so the lower your credit score, the higher your rate will be.The key difference here is that many investors prefer to finance higher risk loans because they’ll make more money off successful transactions.Traditional banks, credit unions, and even online lenders typically have higher lending standards, such as a certain credit score minimum.
Another benefit to this option is that you can spread your repayment term over several years, which can help you manage your monthly payments more easily.
Here’s where the peer-to-peer process differs from a regular loan.
Individual investors (peers) finance your loan and profit from the interest you’re charged — just like a regular bank would.
Another option to consolidate your credit card debt is to pay off your various creditors with a single debt consolidation loan.
Just like a balance transfer, the goal here is to pay off your credit cards and save money by getting a lower interest rate.
Many credit card companies offer low introductory APRs if you transfer balances from other cards and sometimes you might even find a 0% APR deal!