Credit card debt can seem like an overbearing force weighing down your finances. Unlike mortgages or student loans, credit card debt is undoubtedly considered the “bad” debt. With high interest rates, credit card debt can be costly — both to your credit and your finances.
But even with high interest rates, credit card debt is often considered normal — and the numbers prove it. According to an article on NerdWallet, in 2014 the average U.S. household had $15,611 in credit card debt. That is a hefty amount of debt that Americans are carrying!
Imagine what else you could do with $15,611. You could max out an IRA retirement account, travel the world, contribute to a down payment for a house, buy a car, or even build a cushion so you could start your own business.
Money is a tool for freedom and can help you live the life of your dreams. Conversely, debt — and especially credit card debt — can limit your ability to pay for the rest of your life. Relying on credit can become an addictive habit to break.
But most people with large credit card balances face two options: file for bankruptcy or hunker down, work hard and pay it off. Depending on your balance, that could take years. Bankruptcy isn’t an ideal option either, considering the negative ramifications it has on your credit.
It used to be that if you had credit card debt, you were stuck paying the exorbitant interest rates that can easily range from 15-20%. At that interest rate, you will be paying much more over time in interest, which will lengthen your repayment period.
Luckily, there are new options that are emerging to help those battling credit card debt. Enter credit card consolidation. Credit card consolidation can help you get a loan at an even lower interest rate and help you pay off your credit card debt. Yes, you will still have a loan to pay off, but instead of managing multiple payments and multiple interest rates, you are dealing with one lender, and an even lower interest rate, which is huge!
Two Phroogal reviewed options that are completely changing the industry are Payoff and SoFi. Below, find more information about each company and learn about how they can help you.
Payoff has a really great mission of helping people get out of high interest credit card debt, so that they can live their dreams. They just get it. They understand the WHY of getting out of debt. Without the why, many of us would just continue to live in debt.
According to their website, their signature Payoff Loan™offers several key benefits:
- Consolidate your credit card bills into one monthly payment
- Pay off your debt faster
- Lower your overall interest rates
- Eliminate fees (no late fees, no prepayment fees, no hidden fine print)
- Experience our outstanding Payoff Success Team
They offer fixed rates between 7.96% (10% APR) and 19.54% (22% APR). The lower fixed rates can help you combat high variable rates and lower your interest rate, saving you money over time. To get approved you must have at least a 660 or higher credit score. Checking your rate with Payoff or getting what’s called a preapproval does not impact your credit score. But, if you’d like you can get your free credit score first with Credit Sesame.
The best part is that they have eliminated a lot of fees, in order to put money back in your pocket. With Payoff, there are:
- No application fees
- No prepayment penalties or fees
- No late fees
- No check processing fees
- No annual fees
Checking your rate with Payoff does not impact your credit score.
You can also look into SoFi personal loans to help combat credit card debt.
Using a SoFi personal loan, you can pay off your credit cards with fixed rates starting from 5.50% APR (with AutoPay), which is a huge savings compared to typical credit card interest rates.
Some more key info about their personal loan:
- APR range 5.50-899%
- No fees
- Terms are 3, 5, 7 years
- Amount $10,000 – $100,000
As an added bonus, you can take advantage of SoFi member benefits, which include unemployment protection. If you lose your job, they’ll put your payments on pause and help you get back on your feet again, by helping you find a new job.
Checking your rate with SoFi does not impact your credit score. Talk about customer service!
So, if you are dealing with the demon of credit card debt, start looking into your options through credit card consolidation with Payoff or a personal loan from SoFi. Both are great options with great companies that have your back. One thing to note is that a solid credit history is required for both these loans but applying for a preapproval will not impact your credit score.
|Lender||Interest Rate Range||Fixed Rate||Max Repayment Length||Loan Amounts||Rate Check Impacts Credit Score||Full Review||Lender Website|
|SoFi||5.50% – 8.99%||Yes||7 Years||$10,000 – $100,000||No||Yes||Apply|
|Payoff||7.96% – 19.54%||Yes||5 Years||$5,000 – $25,000||No||Yes||Apply|