How to Get Credit Card Debt Loans

If you carry balances on several credit cards and you're starting to have trouble making the minimum payments, it may make more sense to take out one large loan and pay off all your credit cards simultaneously. This type of loan may be secured (using your house or another piece of property as collateral) or unsecured (no collateral). In general, secured loans are easier to get than unsecured loans because lenders do not have to worry as much about losing their investments.

Difficulty: Moderate

Instructions

Things You'll Need:

• Loan officer

Get a Secured Credit Card Debt Loan

1. Interview several lenders to find the best deal possible.

2. Borrow just enough to cover your credit card debt. Make sure that your monthly payment will be affordable by using a monthly payment calculator, like the one found at Bankrate (see Resources below).

3. Make sure there is no penalty for early repayment.

4. Pay the loan off as quickly as possible.

5. Remember that if you fail to pay this loan off in a timely manner, you could lose your property.

Get an Unsecured Credit Card Debt Loan

6. Shop for the right loan. You need a personal loan large enough to cover your entire credit card debt, reasonable interest rates and no penalty for early repayment.

7. Avoid online offers that sound too good to be true. Many of them are scams. Others are real, but charge such high rates that they're not worth your time.

8. Learn your credit score, and expect to have trouble getting an unsecured loan if your credit rating is low. Since unsecured loans aren't backed up by property, lenders have a much harder time collecting if the borrower defaults.

9. Pay the loan off as quickly as possible. If you can, pay 2 to 3 percent more than the minimum payment each month.

Tips & Warnings

• If you don't qualify for an unsecured loan, consider transferring all your credit card balances to one card. Ideally, this card should have a high limit and a low annual-percentage rate (APR). If you don't have a card like this, talk to your credit card creditors and see whether you can negotiate a better deal. Most credit card companies would rather work with an existing client than risk losing business.
• Once you have consolidated all your credit card debt onto one card, pay it off as quickly possible. Pay at least 5 to 8 percent of the balance each month.
• Once you have paid off your credit cards with a loan, lock them away or cancel them, so you are not tempted to run up the balances again. The last thing you want is a stiff loan payment and several credit card payments to manage each month.

Resources

• Bankrate.com loan calculator and amortization schedule.