The average American has more than $4,700 in credit card debt. Assuming an interest rate of 15%, paying the monthly minimum would put the card holder on a decade-long journey to debt freedom. And the grand total forked over to the credit card company during that period? $22,869, including $18,155 in pure interest.
Sound crazy? We agree. But hopeless? Not us. There is something you can do to lower your interest payments and shorten your repayment process. The solution is found in two words: interest rates.
The Key to a Faster Payoff
The key to faster, cheaper debt eradication is to reduce your interest rate. But doing so is often easier said than done for most credit card customers. Without excellent credit, getting a favorable rate is a challenge. Miss a payment, and your interest rate could skyrocket.
But there’s a loophole that even the savviest of credit card customers may not have heard of: a financial product called the personal loan.
A Little-Known Financial Tool
Personal loans are made by various lenders, many of whom offer financial services like home mortgages and auto loans. These personal loans often beat the interest rates of some credit cards, sometimes even cutting them in half. The loans can then be used to pay off credit cards in full, leaving you with a single bill and a much lower interest rate. The result? Lower monthly payments, faster debt eradication, and thousands saved in interest.
So what’s the catch? The biggest hurdle to getting a person loan used to be access. Knowing where to apply (and what to look for) took time, connections, and knowhow. But with services like LendingTree, that hurdle is a thing of the past.
LendingTree makes lenders compete for your business, bringing the country’s most reputable banks together in a single online platform. What used to take hours per application now takes just three minutes. The service is completely free, carries zero obligation, and can all be done from your phone.
- The average American holds $4,700 in credit card debt.
- Securing a lower interest rate can reduce repayment by years.
- Personal loans can be a smart way to pay off credit card debt at lower interest rates.