Those with high levels of credit card debt may want to start considering personal loans for debt consolidation. According to newly-released Federal Reserve data, the spread between the average credit card and personal loan interest rates is between six and seven points. With numbers like those, using a personal loan to consolidate debt could save you a decent amount of money while also helping to improve your credit score. Read on to learn more.
Is it worth consolidating credit card debt?
The data from the Federal Reserve shows that, in the first three months of 2020, borrowers who had credit card debt were charged an average interest rate of 16.61 percent. Meanwhile, those who used a personalized loan to consolidate debt were only charged interest at a rate of 9.63 percent, which is considerably lower.
At a difference of 6.98 percent, it’s actually the biggest spread between credit card and personal loan interest rates since the Fed began tracking this data in 1998.
With loan rates being that much lower, if you were to use a personal loan for debt consolidation, you would likely save on interest, which would both lower the total amount that you end up paying over time and help you to pay down your debts faster. If you would like to get a sense of what personalized loan options are available to you, you can visit Credible to compare rates and lenders…….Read More>>