Will personal loans help pay off more debt by 2023?

Image Source: Getty Images

If you want to get out of debt, read on.


Key Point

  • Paying off debt can be difficult. This is especially true if the interest rate on the debt is high.
  • A personal loan can help reduce the cost of debt and make it easier to repay.

if you want become debt free By 2023, or at least to significantly reduce our debt, we don’t have much time to work on this goal. And there is one move (depending on the situation) that you may be able to make to make paying your balance easier.you can take out personal loan.

Borrowing more money when you’re trying to get out of debt may seem counterintuitive. Here’s why:

How Personal Loans Can Help You Pay Off Debt Faster

Personal loans could pay off more debt by 2023 If Your personal loan has a lower interest rate than the debt you are currently trying to pay off.

Check if you have high interest debt ( credit card), it’s very likely that interest eats up a large portion of all the payments you’re making. So all the payments you’re working hard to send to your creditors can be of little use as long as they help you move forward towards your goal of being debt free.

If you can qualify for a low-interest personal loan, you can convert that debt from a high interest rate to a low interest rate. For example, instead of paying 17% (or more) per annum on a credit card, on a personal loan he could pay 8% or 10%, or whatever interest rate he is entitled to. Then use your personal loan proceeds to pay off that expensive credit card debt.

For example, if you owe $4,000 on one card and $5,000 on another, taking out a personal loan of $9,000 could free you from both loans. You only have one debt to pay and the interest rate is low.

Once you lower interest rates, you’ll need to direct more of your monthly payments toward actually lowering your balance so you can get out of debt faster. This will allow you to further progress in how you pay off your debt for the rest of this year and into next year.

Is this move right for you?

If you are eligible for a new loan at a lower interest rate and doing so won’t extend your payment timeline much, refinancing your higher interest rate debt may be the right move. Loans can be used not only for lower credit card interest rates, but also for all kinds of high-value debt, such as payday loans and medical debt.

To see if this approach works, you can try looking at the rates you can qualify for without affecting your credit score. , and make sure you’re living within your budget so you don’t charge more on your credit card after paying.

If you can get new low-interest loans and take responsibility for repaying them yourself, there is no reason not to pursue this strategy as soon as possible so that you can pay off the maximum amount of your debt by 2023.

Ascent best personal loans for 2022

Our team of independent experts scrutinized the fine print to find hand-picked personal loans that offer competitive interest rates and low fees.Let’s start with our review of The Ascent’s Best personal loans for 2022..

Leave a Comment