A loan to pay off a credit card is a solution that borrowers decide on quite often, especially in the case of increasing debts. Usually, a few thousand dollars is enough to pay off such a loan, so Americans most often use personal loans for amounts over $5,000. From the article you will learn how personal loans can help you save money and on what conditions they are issued.
A credit card is a convenient form of payment, especially when you have an irregular income or you need larger amounts on a daily basis than what you currently have.
In practice, it is one of the forms of a loan, although the form itself is slightly different from a traditional loan. Failure to pay off may have serious consequences, such as difficulties in obtaining a mortgage in the future.
Credit card – when is it worth using?
When using a credit card, you are actually using the bank’s money within the limit granted to you. Moreover, it is renewable as long as you pay off the outstanding debts within the prescribed period. Thanks to this, you have constant access to funds, and not only when the salary day comes.
Credit cards are most often used by businessmen, but it is a solution intended for anyone who only has a certain creditworthiness. Is it worth using a credit card?
As much as possible, as long as you keep an interest-free repayment. Then you get money with a credit card for free. So you lose nothing. The costs appear only when you start having problems with paying the card back within the prescribed period. It is in such situations that personal loans from non-bank organizations come to your aid
Personal loans to pay off Credit Cards
Many customers are considering taking a personal loan to pay off a credit card. It is an opportunity to extend the repayment period, thanks to which the amount of the monthly payment on the credit card decreases. You can get a personal loan both without collateral and by providing your car as collateral.
The most important advantage of a personal loan via the Internet is the ability to complete all formalities from home, without visiting a branch. A personal loan offers are so diverse that we can easily match the one that suits us.
How does it look in practice?
To apply for a personal loan to pay off your credit card, you have to:
- On the lender’s website, we select the loan amount and the repayment period.
- In the application, we indicate all our data.
- The bank contacts us and arranges the details of the offer.
- In case of a positive decision, the money is paid directly to our bank account or an account of another bank.
What is an online personal loan?
Personal loans are becoming more and more popular among customers who want to pay off their credit cards. What are personal loans to pay off a credit card? This is an ordinary personal loan that we will receive entirely via the Internet, without visiting a branch or bank branch. We will arrange all formalities online or by phone. We can use the money from the online loan to pay off other liabilities, some banks also offer additional cash for any purpose.
Importantly, receiving online personal loan is not only convenient, but also reduces the possibility of becoming infected with COVID-19, which is especially important for the elderly.
Who can get a personal loan to pay off a credit card online?
The online personal loan should be used mainly by people who can not cope with the simultaneous repayment of credit cards. Here we will not make it on time, here we will pay too little … and as a result our debts, instead of decreasing, are constantly growing.
A personal loan to pay off a credit card allows you to save money because when you pay off your credit card on time, the interest rate on it won’t continue growing.
To get a personal loan, you must:
- be 18 years old (sometimes the requirement is even 21),
- have American citizenship,
- have proof of income,
- provide ID card,
- have valid email and phone number.
The terms and conditions apply to most of the offers presented.
An online personal loan can also be granted to people who – apart from wanting to pay off their credit cards – also need additional cash (lenders usually provide such an option). The additional amount may then be allocated by the customer for any purpose.
How to get a personal loan online?
The exact process of obtaining a personal loan may differ depending on the specific offer we decide on, but below is presented an overview of the entire process (universal for all non-bank companies where we will get personal loans).
Receiving a personal loan online in a few steps:
- We review various loan offers and compare them.
- We choose the offer that suits us best.
- Click “submit an application”.
- We choose the amount of the loan and the preferred repayment period.
- We fill out the loan application with our personal data.
- We attach the necessary documents.
- We are waiting for the verification of our application.
- We receive a loan decision.
A positive loan decision is equal to the immediate payment of the loan to our account. Therefore, we do not have to leave the house to complete all the formalities related to the online personal loan. The funds from the personal loan to pay off the credit card (or cash loan intended for this purpose) are transferred to the account on the same or at the latest on the next business day.
Online Personal loan – When Will I Receive A Decision?
How quickly we receive a credit decision is greatly influenced by the time we deliver the relevant documents. To submit an application for an online personal loan, most often the data from the ID card (number and series, date of issue, validity) are sufficient. However, in the next stage, the bank may ask us to send the remaining items via the Internet – most often it will be a bank statement or a certificate of income.
Remember that in the case of personal loans to pay off credit cards, we may also be asked to present the debt on the credit card. And this can be time-consuming and significantly delay both the time of receiving the loan decision and the moment when the personal loan is paid to the bank account.
On the other hand, some lenders treat the online personal loans to pay off credit cards as a regular loan and provide fast approval. They assume that the customer can allocate money for any purpose.
Personal loan with bad credit
Clients who have several active financial obligations at the same time, and their financial situation becomes more and more difficult, should take appropriate steps as soon as possible so as not to worsen the situation. In this case, a good solution is a personal loan to pay off the credit card, which will allow you to organize financial matters, extend the repayment time and, above all, reduce the installment amount. But what if we are indebted? Much of this depends on what is meant by debt. When it comes only to a person who currently has several open credits cards, but has been paying them off in a timely manner, and has also acted in the same way with any other financial obligations in the past, then he can certainly apply for a loan at the bank. In this case, it will be necessary to meet several other requirements, such as, for example, adequate creditworthiness or completion of the required formalities.
The situation is a bit different in the case of people who cannot cope with debt repayment so much that they have been entered in the debtors’ register. In this case, we can actually talk about debt. As mentioned, in order to have a chance of obtaining a personal loan with a bank, you should have good creditworthiness, but also a positive credit history. However, it is difficult to talk about this when we are entered in the debtors’ registers. Banks carefully verify their potential customers in such places and do not decide to grant financing to people who have a bad credit history. It is simply too risky for a banking institution. An alternative is therefore a loan for bad credit.
However, this does not mean that a person who is in the debtors’ registers has no chance of obtaining a loan. It is true that the bank will reject such a person’s application, but in such a situation, non-bank institutions behave completely differently. In these places, the lender is not obliged to check his potential client in the databases for debtors. Thus, even people with a negative credit history have the option of obtaining a personal loan with fast approval. The formalities in this case are also very limited. It is worth remembering about a bad credit loan option, which can save us from falling into debt.
Pros of an online personal loans to pay off credit cards
Online personal loan advantages:
- a chance for convenient and quick credit card repayment;
- a chance to lower the total monthly installment;
- quick money withdrawal (even in several minutes on our account);
- no need to leave home;
- high degree of discretion (everything is done online);
- not much formalities.
FAQ
Can you use a personal loan to pay off credit cards?
Definitely. Lender is not interested in the purpose of your loan, so you can use it for credit card pay-off.
Will my credit score go up if I pay off credit cards with a personal loan?
Most likely yes. If you pay off your personal loan on time and use it to pay off your credit card on time, your credit score will not suffer in any way and even get better.