I got some mail recommending that I “have a ball this summer” and get a personal loan.
According to the leaflet it offers me: simplicity – I can roll everything into the one loan – leaving just one repayment each month.
By combining everything leaves me with a lower repayment.
Encourages more spending
Getting a personal loan to put credit cards onto just frees up my credit card limit – it makes it easier to spend.
In my opinion having a fixed repayment makes it easier not to make additional repayments – i.e. your repayments go toward your monthly credit card balance (as it should) and then after you make the minimum repayment on the personal loan, it can be hard to find extra cash to pay off more of the personal loan.
Fees increases the interest rate
I’ll probably have to pay fees with the loan as well (such as an establishment fee and a monthly fee).
The most obvious solution:
Obviously cutting back on your spending for a few months is the best solution. But this can be difficult. It might mean saying no to things, having
Another solution: Moving credit cards to receive a reduced interest rate on the balance
Another way to try to pay off the debt is to get a new credit card with the best balance transfer so you pay a lower interest rate for (say) 6 months so that you can try to make a dent in the credit card.