Even Staff

2016-04-26

Using a Personal Loan to Consolidate Credit Card Debt

Credit card debt: the great equalizer. Most people who are buried under credit card debt are in the same boat -- stressed, frustrated and looking for a way out. If you can barely make your minimum monthly payments, things may feel hopeless; but don't worry -- there's a solution that might work for you: get a credit card consolidation loan. Credit card consolidation involves getting a new loan -- at a better interest rate -- to pay down multiple credit cards more efficiently. People often consolidate by applying for a personal loan, but other consolidation strategies, like alternative loans, may better suit your needs.

 

Effective Consolidation Strategies

 

Credit card debt can build up for a lot of reasons. Wedding expenses, unexpected medical bills, or personal emergencies can leave you in a financial lurch -- or maybe you lost track of spending, and things just got out of hand. Bottom line? If you want to kill your credit cards once and for all without bankruptcy, and you can't pay them off on your own, debt consolidation is the way to go.

 

Strategies include:

 

  • Personal Loans: If you go this route, you will need to apply for a loan at a local credit union or bank. Alternatively, you might use an online lender. These are unsecured loans, however, and your credit worthiness will need to be high enough for approval. Not everyone will be able to get approved, and sometimes, the interest rates will be high.
  • Alternative Lending: Alternative loans, also called peer-to-peer loans, may be available if you're unable to secure a personal loan at good interest rate -- which is usually the case if you're overloaded with debt. Different internet-based services, for example, connect borrowers with individual investors interested in lending them money. Some say it's the solution of the future for people who are stuck in debt.
  • Balance Transfers: This involves opening an account with a new credit card that offers a balance transfer deal, which might be a 0% interest rate for a year on any transferred balances. This is a great way of getting your existing credit card debt under control so you can get a break from high interest rates. However, make sure you can pay off the debt before your 0% rate expires.
  • Home Equity Loans: If you own your home, you might be able to take out a line of credit against the equity. With a secured loan like this, the interest rates will probably be lower; however, if you fail to make your payments on this loan, your home could be taken away from you. This is very risky, so only choose this strategy if you are financially secure.

 

 

The best thing about these credit card debt consolidation strategies is that they can potentially help your credit rating, as you will be paying down your debt more efficiently, and you won't have all those maxed out credit cards anymore.

 

What to Consider When Choosing a Strategy

 

Ultimately, you should choose the most efficient strategy for which you qualify. When looking at your options, keep the following considerations in mind:

 

  • Keep It Simple: It is far easier to manage one debt payment each month rather than seven. If you're juggling a lot of cards, it's easy to misplace or forget a bill. Missed payments can rack up fees and more interest. The simpler your repayment strategy, the better your chances of following it through to completion.
  • Find the Lowest Interest Rates: You want a loan with a lower interest rate than your credit cards. This allows you to pay off your debt faster.
  • Make Sure It Works: It's tempting to jump into more debt before fully analyzing a strategy. Prior to taking out a loan, make sure you can meet the monthly payment obligations, and make sure you know the exact payoff date.

 

Before You Choose a Consolidation Loan

 

Before engaging on your consolidation loan strategy, these steps will help you decide if getting the loan is a better deal for you than keeping your cards:

  • Negotiate With Your Credit Card Company: Call your credit cards and ask for lower interest rates. If you've been a customer for a long time and you consistently pay your bills, there's a good chance they'll lower your rate. Don't give up with just one call! Try three or four times to see if you'll have better luck with a different representative.
  • How Long Would It Take Just to Pay Them Off? You need to know how long it would take to pay off your cards normally, if you consistently worked to make the highest payments you can reasonably afford. If you can reasonably pay them off within a six months to a year, it might be easier and less complicated simply to do so.

 

Consider Alternative Lending

 

If you're finding it difficult to secure a personal loan from a local bank or online lender at a fair interest rate, don't forget about alternative lending options. At Even Financial, we match people looking for alternative loans with lenders offering the best interest rates available. All it takes is a couple of clicks to see if you qualify.

Disclaimer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. While Even Financial finds these sources to be accurate, it does not endorse or guarantee any third-party content

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Even Financial Partners with Figure to Add Blockchain-Enabled Personal Loan Products to its Financial Services Marketplace
EVEN
Even Financial Partners with Figure to Add Blockchain-Enabled Personal Loan Products to its Financial Services Marketplace
New York, New York – June 2, 2021 – Even Financial (“Even”), the leading search, comparison, and recommendation engine for financial services, has announced a new partnership with Figure to launch the company’s personal loan products on the Even platform. Leveraging machine learning and advanced data science, Even solves a significant pain point in financial services acquisition by seamlessly bridging financial institutions and channel partners via its industry-leading API and embeddable solutions.   Figure is a fintech company that leverages AI, blockchain, and analytics to deliver innovative consumer financial products with speed and ease. Figure has dramatically decreased the time it takes for consumers to secure loans and has significantly reduced the costs associated with loan origination, servicing, financing, and capital markets execution. The company was founded in 2018 to unlock new access points for consumer credit products that can transform the financial lives of its customers. In addition to personal loans, it provides mortgage refinancing and home equity release solutions, including home equity lines of credit, home improvement loans, and home buy-lease back offerings for retirement.   Figure is an exciting, advanced provider that is driving transformational change in consumer credit,” said Phill Rosen, Founder and CEO of Even Financial. “We’re thrilled to welcome them to Even’s unparalleled network of loan products.”   Shwetabh Gautam, Director of Financial Institution Partnerships at Even added: “We continue to see a strong resurgence in the demand for lending products across the millions of consumers Even surfaces offers for each month. The addition of cutting-edge partners like Figure strengthens our ability to connect consumers with the loans best suited for their unique needs.”   Even offers the largest network of premium, API-connected loan providers. Enterprises and established publishers such as MoneyLion and TransUnion partner with Even to power financial product offers for loans and other financial services including insurance, credit cards, and savings. Within loans, Even continues to expand its vast offering, recently launching products for secured lending, line of credit, and auto refinancing.   The launch of Figure on the Even platform enables consumers to get matched with personal loans of up to $50,000. Figure offers a 100% online application that allows applicants to apply and see their rate in minutes and access funding in as few as two days.   “Phill and the team at Even share our vision of leveraging blockchain technology to make financial services simpler, faster, and personalized. Through the Even platform, we will be able to reach a broader and more diverse set of consumers seeking our innovative credit products,” said Brad Simmons, CMO of Figure.   Even has continued its rapid growth trajectory in 2021, facilitating over $3 billion in consumer credit issued through its API and expanding its platform to over 400 partners. Earlier this year, Even was named one of “America’s Best Startup Employers'' by Forbes for 2021 and placed in the Top 50 of the 2020 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world.    About Even Financial Founded in 2014, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. As the leading search, comparison, and recommendation engine for financial services, Even seamlessly bridges financial institutions (including American Express, Goldman Sachs, and SoFi) and channel partners (such as MoneyLion and TransUnion) via its simple yet robust API and embeddable solutions. Even turns any consumer touchpoint into a comprehensive financial services marketplace with full compliance and security at scale. The company is backed by leading financial services firms and VCs, including American Express Ventures, Canaan Partners, Citi Ventures, Fidelity’s F-Prime Capital, Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Learn more at www.evenfinancial.com.  About Figure Figure is transforming the trillion dollar financial services industry using blockchain technology. In three short years, Figure has unveiled a series of fintech firsts using blockchain for loan origination, equity management, private fund services, banking, and payments sectors – bringing speed, efficiency, and savings to both consumers and institutions. The company was founded in 2018 by serial technology entrepreneur Mike Cagney, who also founded SoFi and built the company into a multi-billion dollar business under his leadership as CEO. Learn more at www.figure.com.   Media Contact media@evenfinancial.com
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