If your budget is tight and you have no plans to make extra money to pay off your debt faster, it might be hard to manage.Some personal loan companies charge an origination fee.Some even let you pre-qualify with a soft credit check, which won’t hurt your credit score.If you can qualify for a low interest rate, a low or nonexistent origination fee, and a manageable monthly payment, the math could be in your favor.This fee typically ranges from 1 percent to 6 percent of the loan amount.
A personal loan to pay off credit cards is often called a credit card consolidation loan.
So, depending on the situation, using a personal loan to pay off credit cards could be more expensive, even if the loan has a lower interest rate.
If you have a solid credit history and high-interest credit card debt, a credit card consolidation loan could help you save money on interest and repay your debt sooner.
Also, if you don’t pay off the balance before the promotional period ends, you’re back to where you started, at least with regard to having a high interest rate.
At the end of the day, make sure you’re taking the time to consider all your credit card debt consolidation options.
That’s mostly because credit cards don’t have a set repayment period.