How do you get the best rates for credit card consolidation?

Credit card consolidation, in particular, can save you a lot of money if you get a lower interest rate on the new loan or credit card, the latter if you transfer balances to another card. .

However, when considering consolidating your credit card debt, there are many factors that you need to consider, as loan companies will take them into account as well.

Here are the top tips that will show you how to get the best credit card consolidation rates and help you get out of credit card debt faster.

Pre-qualified

First, try the prequalification to get an idea of ​​what ready and the interest rates that you could potentially qualify for. This can help you determine if you need to strengthen your credit before applying for a credit card consolidation loan, as your credit score will be a big factor in the type of loan and terms you can get.

If you don’t prequalify, you may be disappointed with your options and consolidating may not be worth the time or expense.

Credit cards with balance transfer

This strategy allows you to move multiple balances to a new credit card, usually with an introductory interest rate of zero percent for a certain period. Typically, you’ll be offered a zero percent APR for 12 to 21 months, and you can save a lot of money if you pay off your balances during this promotional period.

However, if you do not make your minimum monthly payments or if you continue to hold the balance after the introductory interest period, that balance may incur interest and penalties. Yet balance transfer cards offer the best rates for credit card consolidation if you can pay your balance before the end of the introductory period.

consolidation loan

You could merge several debts into a single loan for lower your monthly payment by obtaining a personal loan, secured or unsecured.

On a secured consolidation loan, you must provide collateral to the lender. Typically, on a secured personal loan or secured consolidation loan, you may be able to get a lower interest rate, a longer loan term, or a combination of both.

If you apply for an unsecured personal loan, the average interest rate you can expect is around 9.34%, but it can vary from 7% to 36%, depending on the lender and your credit score. The average interest on credit cards is 16.43%, and again, yours may be higher depending on your credit score and payment history.

Therefore, a debt consolidation loan or personal loan could save you a lot of money, depending on the terms of the loan and the interest rate.

A good credit rating will help you qualify for lower rates on a debt consolidation loan. In addition, your debt ratio can be an important factor in qualifying. Your debt-to-income ratio is how much of your gross income you spend paying down your debt.

If your ratio is 43% or higher, you probably can’t be approved for much lower interest rates than you have on your credit cards today.

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