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Avoiding insurmountable credit card debt

Credit card bills require payment of the underlying purchase, along with interest at rates which may exceed the combined interest for mortgages, vehicle loans and student loans. Debt consolidation is one strategy that can help prevent unreasonable credit card debt that can lead to bankruptcy or loss of property.

A personal loan or credit card consolidation loan can be used to consolidate debt. It can lower interest rates and allow predictable monthly payments. Existing debt can be consolidated into an unsecured personal loan that is usually repayable in two to seven years. Lenders usually approve loan amounts of $1,000 to $100,000.

Loan consolidation can also reduce APRs for credit cards which can be as high as 10 to 25 percent and exceed the interest rates for all other combined consumer debt. These high interest rates can become an insurmountable financial obstacle to paying off credit cards. Consolidation loans, on the other hand, may have more manageable rates as low as 5.47 percent.

Obtaining a personal loan for debt consolidation can provide for a fixed interest rate. However, a variable interest rate that changes over time governs credit card debt. By obtaining a personal loan, the debtor pays a predictable fixed rate each month regardless of any rise in interest rates. Debtors can apply for a personal consolidation loan online. Lenders will set an interest rate based on their evaluation of their financial and credit history, credit score and income. A personal loan may also be processed relatively quickly because it can be funded within a matter of days.

Debt consolidation, however, may not satisfactorily resolve credit card debt that is excessive or if a debtor underwent serious financial hardship, such as unemployment or a personal problem like a serious illness. Bankruptcy protection under federal law may be an option.

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
Fax: 423-877-0363
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