Paying off the debt amount is not always that easy of a task. However, the lower form of interest rate along with the smaller payments can easily be used for lightening up the load. Whenever the matter is associated with some of the common consumer debts like personal loans and credit cards, it can always help in lowering the rate including debt consolidation loans and balance transfer. Now the main question catching up in your mind is the difference between these two options and which one seems to be the best among the lot. They have their shares of advantages and disadvantages and can always make an educated decision once you have gladly understood the fees and how the debt might be currently set up now. You might want to get along with the nationaldebtrelief.com for some details in this regard lately.
Credit card based balance transfer:
With the help of a credit card based balance transfer, you can easily move the debt to the existing or the new credit card. For doing that, the card issuer might be the one to offer you with the promotional convenience checks or just allow the person to request for the transfer online. These credit card balance transfers happen to be the most attractive ones in ton whenever you are makings plans to pay the debt off quickly.
- In some of the best possible scenarios, you might have to pay no interest on the debt or least for a limited period of time.
- Eliminating the interest rates can help in stopping the bleeding as the loan balance will then stop growing.
- Around 100% of every payment will then go towards reducing the said debt. But, it is also quite critical to just understand the proper terms of the said offer over here.
Heading towards the fees:
It is always important to find out whether you might have to pay any fee to the transfer balance or not. Costs are most subjected to be around 3% of the amount that you care to transfer or even the flat dollar amount, whichever you think to be possible. Any form of saving that you can procure from the lower rate of interest will have to be more than covering the present transfer fee. Chances are high that you might take on the annual fees, the new ones, while planning to open new credit cards.
Time for the interest rates:
The best and the most promising interest rates are likely to be made available for the consumers with good and great credit. There are high chances that you might end up seeing some of the tempting offers right in advertisements. However, always be sure to just review what the issuer of the card actually has to offer after reviewing the credits.
- Even when you get around 0% APR, the rate may not last that long. So, remember to check in when those rates are subject to change and what might happen after that promotional period ends.
- In some of the cases, you might have to just pay off the balances during the said promotional period, for the sake of just avoiding the deferred interest based charges over here.
Time to catch up with the credit with balance transfer:
Balance transfer offers are not quite necessarily that bad for the credit but that might cause some serious problems over here. Every time you are applying for that new card, lenders have this tendency to just check the credit history first. Those inquiries are the opens to ding credit scores. Having way too many of the consumer accounts can always lower the score. If you ever end up using the credit card for transferring balances, always remember to use them just like your debt payoff tool and not any debt increasing tool. You can further avoid using the card that you paid off just to go right deep into debt.
Now time for debt consolidation:
In place of just using the credit cards, you can always consolidate debt with the said personal loan, P2P loan or any form of secured loan. A larger loan might just allow you to combine various loans and then get everything right in one proper place. Debt consolidation loan will always be associated with that fixed rate so that you can easily make some more sense whenever the credit card based promotional periods seem short. An example might seal the deal. A 0% APR offer might take place for three months but may not be that useful if you are expecting to take around 3 years for paying down the debt.
Fees of the debt consolidation:
You may or may not pay any of the upfront fees for the current debt consolidation loans. With some of the loans, chances are high that you see some of the obvious costs like origination or processing fees. With some of the other loans, the costs might be invisible but they are well built into interest rates. Make sure to compare multiple loans to get the right combo of the interest charges and upfront fees that might benefit you the most in this regard.
Heading towards the interest rates:
The interest rate payment depends on loan type you use. A personal form of unsecured loan comes with higher rate than any secured home equity one. Still, you might have to pay an interest rate, which is lower than standardized credit card based interest rates. On the other hand, promotional credit card or the teaser rates might be quite lower, well at least for a few months to be sure.
Your choice is the final call:
It is always your final call to choose between the balance transfers or the debt consolidation rates. Make sure to learn the pros and cons of both the areas before you can actually make up for the final call over here. The more you research, the better it is going to be over here for sure.