Real Answers for Life’s Money Challenges
I have $20,000 in credit card debt.
I recently got an offer from a card for a personal loan.
Should I take it, and what are the pros and cons for a personal loan?
Fielding Offers
Dear Fielding,
Whether apersonal loanis a good fit for you depends on a lot of factors.
Also consider how a loan payment would fit into your financial picture.
If you use a personal loan to repay your credit card debt, youll likely pay less over time.
Youll also free up your credit card balances for more spending.
Heard of These Credit Card Debt Tips?
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One con torefinancing your credit card debtinto a personal loan is that your minimum monthly payment might go up.
With credit cards, a typical minimum payment is around 2% of your balance so maybe $400?
Most importantly, though, consider the source of this loan offer before diving in.
Start with a local bank or credit union, especially anywhere you already have an account.
Dana Miranda is a Certified Educator in Personal Finance and author of YOU DONT NEED A BUDGET.
