Getting out of credit card debt is complicated and while you have many options, none of them are easy. Consolidating all your credit card debt is one of the ways to pay off your debt. An installment loan can help you with this. Use the loan money for paying off all your debts so you only have one easy payment to make every month. This benefits your finances and your credit score. The best site for instant approval loans with no hard credit check will help you get the money you need to consolidate all your credit card debts.
How Installment Loans Work
With an installment loan, you pay off the loan in a series of fixed, regular payments. You will borrow a lump sum of money that you will pay plus interest. Your loan’s interest will vary depending on your credit score and lender. If you have a higher credit score, lenders are more likely to charge you a lower interest you.
Installment loan interests accrue over time. If you choose a longer loan term, expect to pay more interest. But, this interest will accrue based on the remaining principal. Also, this kind of loan is amortizing, thus, each payment you make goes toward the principal you owe and the interest. The amortization schedule of the loan determines the amount that goes towards each; however, you can be sure that making on-time payments will get you closer to being debt-free.
Can you Save Money?
Paying off your credit cards with a single installment loan will almost certainly save you money in the long run. An installment loan’s standard term is anywhere between 1 and 5 years. And regardless of the length of the repayment term, it is shorter than the length of time it would take to pay off your credit cards when making just the minimum payments. Overall, you will be able to save money on the shorter repayment option.
Usually, the monthly minimums for credit cards is quite small, with every payment just accounting for something like 1% to 3% of the amount owed. When factoring in interest rates, it could take you more than ten years to pay off your cards. Keep in mind that the longer a credit card debt is outstanding, the more money you will have to pay towards interest.
Racking up lots of excess credit card debt will lower your credit score. Did you know that the amount you owe is one of the most important factors in creating your credit score? This reduces your chances of finding a loan from an offline lender with a good rate.