When a Louisiana consumer is financially overwhelmed, there are a few options for what he or she could do to take back control of bills and expenses. One of these options is debt consolidation, a process that may be particularly useful for individuals who have significant amounts of credit card debt. This is often done by taking out a personal loan that consolidates card balances into one payment each month. It can help save money on interest and payment amounts.
In the first part of 2020, the interest rates associated with credit card debt averaged around 16%. Interest rates associated with personal loans averaged around 9% to 10%. By consolidating credit card debt through a personal loan, a consumer may be able to save money on interest alone. By keeping up with payments, a credit card holder may be able to pay off his or her balances faster.
Like with other types of loans, it is crucial for a consumer to pay close attention to the terms, including interest rates and collateral required to secure the loan. A Louisiana loan applicant will also want to pay close attention to the monthly payment to ensure it is within his or her budget. It is also important to look at how long the applicant has to pay off the balances, whether interest will increase and other small print that may cause potential problems later.
Credit card debt can lead to financial trouble, but there are ways out. Debt consolidation can be a useful option in some cases, but it is not always the best choice. In some situations, it may be better to consider filing for consumer bankruptcy in order to deal with certain types of balances once and for all.