Should I take out a personal loan to pay off my credit cards?

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    Stilt Team (Edited )

    In terms of cost of debt - credit cards are one of the most expensive forms of debt after payday loans. The average interest rates for credit cards in the U.S. is ~15%. There are additional fees like late payment fees, compounded interest if you don’t pay off your balance every month etc. This makes it really costly to revolve debt on credit cards.

    Personal loans are a slightly more restrictive but cheaper way to pay off credit cards. The interest rates are fixed (usually lower teens) with a fixed term and you have a pay off date. You are not constantly revolving the same debt and paying hundreds of dollars in fees.

    It may not be worth to take a loan for just $500 in credit card debt as personal loan providers have minimum amount they’ll lend. You can take a higher loan and prepay as most don’t charge a prepayment penalty. Keep in mind the origination fees and interest rates may not make it worthwhile to get a loan.

    If you decide to take a loan, you can go to lenders like Lending Club, Prosper, LoanDepot, and many others.

    About Stilt:

    Stilt provides loans to international students and working professionals in the U.S. (F-1, OPT, H-1B, O-1, L-1, TN visa holders) at rates lower than any other lender. Learn more about us on wikipedia or visit us at https://www.stilt.co. If you have any questions, send us an email at team@stilt.co.

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