Best online credit card consolidation loan company?
October 30, 2024 6:34 PM
My sister wants to consolidate a couple credit cards into a lower interest personal loan. What is the best non-scammy online company for this?
Details:
* Her credit is pretty good and her income is relatively good, she’s been preapproved for a few services she’s looked into. So no need to optimize for bad credit, etc.
* This is mainly a timeline thing, she’s making good progress on this debt but is about to hit the end of a promotional rate and wants a lower rate going forward. Both credit cards are in the 24.99%ish range, so she just wants to improve on that. So far about 9% seems realistic?
So far we’ve looked at SoFi and LendingClub and were just planning on picking the best interest rate, but wondering if there are any other factors to consider.
She thinks of me as “good with money” so she asked for my help, but I don’t actually know much about debt consolidation, so hoping someone here can help!
Details:
* Her credit is pretty good and her income is relatively good, she’s been preapproved for a few services she’s looked into. So no need to optimize for bad credit, etc.
* This is mainly a timeline thing, she’s making good progress on this debt but is about to hit the end of a promotional rate and wants a lower rate going forward. Both credit cards are in the 24.99%ish range, so she just wants to improve on that. So far about 9% seems realistic?
So far we’ve looked at SoFi and LendingClub and were just planning on picking the best interest rate, but wondering if there are any other factors to consider.
She thinks of me as “good with money” so she asked for my help, but I don’t actually know much about debt consolidation, so hoping someone here can help!
Could her bank do a line of credit?
posted by nouvelle-personne at 2:48 AM on October 31
posted by nouvelle-personne at 2:48 AM on October 31
Origination fees. You run the numbers out and see which one costs less when you add together the interest plus fees.
posted by chesty_a_arthur at 4:37 AM on October 31
posted by chesty_a_arthur at 4:37 AM on October 31
If she registers for a free account at CreditKarma.com they will present a whole page of loan offers for her, based on her credit score/income. She can compare and find the best combination of rates/fees. (Plus, it's good to monitor your credit!)
posted by DirtyOldTown at 5:58 AM on October 31
posted by DirtyOldTown at 5:58 AM on October 31
When I’ve needed something like this, I open a balance transfer credit card. It offers 0% APR for 12-18 months. As long as the balance transferred from the old card is paid off in full inside of the promotional period, you basically get a free* loan for that timeframe by chunking out the amt transferred into monthly payments thru the new card.
*there’s no interest charged per month. but usually a 2/4/5% fee up front for the transfer.
Ex - I had $4k balance on one credit card - opened a new balance transfer card with a 18 month promo period - paid $200 for the one time, up front fee - and have been paying off $300 a month (well above the $77/month minimum payment) so that it’s paid in full before the deadline.
My total debt load rose by $150 dollars, but it allows me 18 months to pay it off.
Ideal for: people who have good credit, know they can pay it off in full by the end of the promo period, good credit card hygiene, can afford the monthly payments.
Not ideal for: credit scores too low for new card approval, if you’re unsure that you can afford the monthly payments, if you’ll only be paying the minimum each month.
If you fail to pay in full by the time the promo period ends, they sock you with horrendous fees. I think something monstrous like full 22% APR on the entire initial balance transfer amt. dont quote me on that, but I remember reading the fine print and it’s draconian unless paid in full by promo period end.
posted by seemoorglass at 6:36 AM on October 31
*there’s no interest charged per month. but usually a 2/4/5% fee up front for the transfer.
Ex - I had $4k balance on one credit card - opened a new balance transfer card with a 18 month promo period - paid $200 for the one time, up front fee - and have been paying off $300 a month (well above the $77/month minimum payment) so that it’s paid in full before the deadline.
My total debt load rose by $150 dollars, but it allows me 18 months to pay it off.
Ideal for: people who have good credit, know they can pay it off in full by the end of the promo period, good credit card hygiene, can afford the monthly payments.
Not ideal for: credit scores too low for new card approval, if you’re unsure that you can afford the monthly payments, if you’ll only be paying the minimum each month.
If you fail to pay in full by the time the promo period ends, they sock you with horrendous fees. I think something monstrous like full 22% APR on the entire initial balance transfer amt. dont quote me on that, but I remember reading the fine print and it’s draconian unless paid in full by promo period end.
posted by seemoorglass at 6:36 AM on October 31
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posted by soelo at 8:11 PM on October 30