You know what? Sometimes the best way to pay down debt is by taking out another loan.
Right now you’re probably thinking…
“What the heck is this guy saying?!? This guy is nuts.
Debt is the whole reason I’m in this mess. Why would I take out another loan?”
But I’m being 100% serious; the best way to pay down debt might just be another loan. Just hear me out.
When people need money fast it’s often to pay for bills that are due or past due. These could be electric bills, heating bills, rent bills or credit card bills. If you need money to help pay down your credit card then taking out another loan might be the answer.
Credit cards usually charge ungodly interest rates of 20-30%. These high interest rates make those innocent purchases turn into ugly nightmares. By taking out a debt consolidation loan you can reduce your interest from 20-30% to 7-10%. This can help reduce your monthly payments or shorten the time it take to pay down your debt.
Best Way To Pay Down Debt:
Over the last few years there has been a rise in online lending services. Online lending sites like PersonalLoans.com* offer debt consolidation loans that start at just 7%. That means on a $10,000 credit card balance you could save ~$2,300 a year in interest!!! Your interest payments would go from $3,000 a year to just $700 a year. That $2,300 you save can go directly to paying down your debt faster.
To see if you qualify for an online loan you can visit PersonalLoans.com.
Pay Down Debt Faster:
You can use this handy online calculator to figure out how much faster you could pay down your CC debt by consolidating it.
As an example lets take someone with $10,000 in credit card debt at 30% interest per year. Lets say this person pays just $400 per month towards their balance. How long until they’re debt free? A whole 40 months!
Now let’s assume they get a loan from PersonalLoans.com and reduce their interest rate from 30% to 7% but they keep paying the same $400 per month. How long until they’re debt free now? Only 28 months!!! That’s one whole year faster!
The Best Way To Pay Down Debt:
An online loan from PersonalLoans.com might be the perfect way for you to pay down your debt. By reducing your interest rate you’ll put more of your payments towards principle.
But if you do use a debt consolidation loan to pay down your credit card debt then it’s important to prevent it from building up again. So cut up your credit cards. Or keep them for emergencies but put them in a block of water and freeze them in your freezer. This will let you keep a credit card around for emergencies but avoid those impulse purchases.
Photo by StockMonkeys.com via Flickr
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