In my previous post, I mentioned about the "snowball" strategy. In this post, I would like to offer an alternate method to that.
Normally, personal loan interest rates are lower than the credit card interest rates. We can take advantage of this by consolidating all your credit card debts and take up a personal loan to pay off all your credit card debts.
You gain 4 valuable things from doing this:
- Your monthly payout on the consolidated personal loan will be smaller than if you are to pay your credit card debts individually - you will free up more money from your monthly income. Good thing to have in this trying times.
- The total interest paid for the loan will be smaller than the interest paid on your credit card.
- In one move, you will eliminate all your credit card debts! So, no more annoying calls from the bank or debt collecting agencies.
- Your credit rating can also be improved from this.
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