Should I Borrow Loan To Pay Off My Credit Card Debt Singapore

Credit Card

Getting another loan to have enough funds for a debt on your credit card is an unorthodox method of paying off debt. It does, however, help you save money in the long run. A personal loan is a good option in paying off credit card debt.

Can I get a loan to pay off credit cards?

What personal loan lenders usually do is they first check your credit score and make sure that you’re able to repay the loan in the stipulated time. 

They will also check your cash flow and ensure that you’ve got a stable source of income for you to qualify for the credit card debt loan repay process.

You should also be considered to be a low-risk client, because if not, then they won’t accept your loan application. 

Frankly speaking, it is hard for you to borrow and get a loan to pay off credit card balance or loan credit card debt. This is especially true if you’ve got a history of late personal loan payment and maxed out credit limits.

You could, however, try having a cosigner to qualify and borrow a personal loan. But this puts their credit at stake. You can also take care of some of your existing credit cards balance first by paying off smaller personal loan credit card debt amounts.

This improves your credit score slowly. But it’s better than having no improvement at all, especially if you need a personal loan soon. And the same goes for unsecured loans. 

Also, expect high-interest personal loan rates if ever you qualify and borrow personal loan despite having current credit card debt.

Is it a good idea to take out a personal loan to pay off credit cards debt?

Getting a personal loan to pay off your credit balances is an option, but is it a wise choice? Before proceeding, it’s first important to know that you won’t get a low-interest rate personal loan if you’ve got a 0% credit APR. In simpler words, you getting high-interest personal loan rates, making it more difficult to pay off credit and loan.

Thus, it’s better if you wait until your 0% interest personal loan rate expires. That’s then the time that you get a personal loan to pay off your credit card debt balance. And be careful of money lenders because most charge a loan interest  rate of 35%.

Also, put origination fees into consideration when borrowing for a loan. It’s best that you stick to paying off your credit balance first instead of getting a rushed high-interest personal loan that’s to be paid in a few months.

There are, however, a few credible credit unsecured personal loans lenders such as 365 Credit that offers justifiable rates and varied loan tenure durations for paying. This gives you a lot of loan choices on how or when you’re going to pay off your loan and complete your payment.

Pay online using credit card

How can I pay off 5000 credit card debt fast?

What’s great about personal loan is that they can be paid off over various time lengths. The amount you pay monthly also varies on your personal loan tenure duration.

This means that you’re going to spend less on the total personal loan repayment amount if you were to pay higher amounts monthly, instead of paying the minimum loan monthly amount. So, the technique here is to pay off large amounts of loan fast. Pay off credit cards debt in the highest possible loan amount you can afford to speed up credit card debt repayment.

But make sure that you can pay off your debt and complete the personal loan payment for the next coming months. Not doing so puts your credit rating at risk.

Getting to borrow a personal loan can also make you credit card debt-free faster if you’re going to spend it on paying off your credit debt. But make sure that you spend within your capability and not get new personal loan balances from your other credit cards.

Getting to borrow a personal loan and spending the money to pay off credit card debt is good if you have full control over your budget. But if not, then you end up owing more for debt consolidation.

OCBC 365 Credit, is, however, a great debt consolidation option if you’re wanting to get a new credit cards. It maximizes rebates for your daily expenditures. Take for example its 6% rebate on meal deliveries and dining, 3% on utility bills, groceries, and transport, and up to a whopping 23% for fuel costs.

You can even get up to S$80 monthly or S$960 annually for expenditure payments of S$10,000 in a year. Not to mention that you are also entitled to get a fee-waiver so you don’t have to pay for annual fees. It’s a great strategy if you’re going to spend around S$2,000 monthly in payments.

Having these incentives means that you get to save money because of the cashback bonus payments. This makes it faster for you to pay off outstanding personal loan debt fast with payment. Also take note of your balance transfer to get a step by step updated personal loans status every month.

You can click here to compare and know more about 365 Credit and what payments to make.

Should I take a home equity loan to pay credit cards debt?

Home equity is another choice to make to pay off credit cards debt or debt consolidation loan balance. But it poses huge risk, especially that your home is used as collateral for your loan payment. However, it does have its own advantages and payment disadvantages.

You can compare them here: 

Pros

  • Home equity loan interest rates, as well as those of home equity lines of credit,  are lower than the rates given by credit cards. This makes it a great loan choice strategy if you want to get the lowest possible rate and pay off credit card debt easily. Be sure, though, that you can repay it so that your home or collateral property won’t be embargoed.
  • The interest for home equity loan payment can also be considered tax-deductible depending on terms of having to pay off and repay your credit card. This isn’t the case for credit cards interests and personal loan when repayments happen.

Cons

  • Getting to choose home equity means you risk losing your home and having your property foreclosed if you fail the payments.
  • You could end up having higher loan and credit card debt when you compare if the value of your home drops.
  • Loan tenures are long to pay, usually 10 years or more, depending on the monthly payments plan you choose and compare.
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Conclusion

With this being said, it’s clear to say that borrowing loan to pay off your credit card is a logical choice so that you won’t get higher debt especially if your credit’s interest rate is high. 

Be sure, though, to know all the details regarding the loan you’re getting, as well as your credit rates.

If you’re planning to get one, it’s best you try out 365 Credit Solutions.

 

About 365 Credit Solutions

365 Credit Solutions Pte Ltd is an established licensed moneylender since 2010 (formerly known as FLS Credit and Fu Lu Shou Credit), accredited by the Registry of Moneylenders in Singapore. We specialize in providing personal, payday, bridging, foreigner, business loans to Singaporeans & Foreigners working in Singapore.

 

Our mission is to help make taking a loan a simpler, more understandable process, and to educate our customers about their loan options in the event of an urgent need.

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