When an urgent financial need rears its head – a leaky roof, an emergency medical bill, or, heaven forbid, an unexpected funeral – many people turn to credit cards or payday lenders for help. These lenders can be punishingly expensive, but they may seem attractive because in such situations you just don’t have time to sit down and apply for a home equity line of credit or look at refinancing your mortgage.
You can get the funds from a personal loan within two weeks of applying online, making quick Dallas payday loans it just a little slower than the alternatives and potentially much more affordable. (See also: 5 Times Personal Loans May Be Better Than Credit Cards)
One of the most common uses for a personal loan is to consolidate existing debt, like credit card balances, student loans, and car loans. You may be able to get a lower interest rate than you were paying on your other debts, and you also have the organizational benefit of having only one bill to pay each month. However, when transferring one kind of loan to another, you should .
7. … Be aware of what you may be giving up
Some marketplace lenders heavily market the idea of refinancing student loan debt into personal loans. But before you make a decision like that, you should compare your old loan and new loan carefully, the Consumer Financial Protection Bureau warned in a 2016 release.
“[I]n some cases consumers could lose important loan-specific protections by refinancing an existing debt. Specifically, consumers should know that they may sign away certain federal benefits, such as income-driven repayment for federal student loans or service member benefits,” the CFPB said. (See also: 8 Valuable Rights You Might Lose When You Refinance Student Loans)
8. You might be better off with a different type of loan
If you’re trying to get a better rate on credit card debt while you pay it off, before you commit to a personal loan, shop around to see what else is out there. Continue reading “6. Personal loans can save you a lot on debt you already have”