Can’t Get a Balance Transfer Card? Consider a Personal Loan

For those struggling with credit card debt, one of the biggest issues is mounting interest charges. It’s hard to stop the bleeding when compounding interest gets tacked on every month, which becomes even more challenging the higher the debt balance. 

Many Americans have combated the issue by performing a balance transfer to a card with a lower interest rate — ideally a 0% (link: /learn/articles/what-are-the-benefits-of-an-introductory-apr text: Introductory APR) offer for a set promotional period of time— allowing them to pay off their debt without the added hassle of sky-high interest charges inflating an account balance. 

However, the financial effects of COVID-19 have caused many credit card issuers to pull back caused many credit card issuers to pull back on 0% APR offers for balance transfers, by either reducing the length of the promotional periods or getting rid of the offers altogether. A big contributing factor is issuers wanting to reduce risk, which will make it more difficult for consumers with lower credit scores to take advantage of 0% APR. 

When balance transfer cards aren’t an option, how else can consumers look to pay off their credit card debt while reducing the burden of high-cost interest? One option to consider is a personal loan, which just so happens to be the fastest growing consumer lending product. 

How Can a Personal Loan Help Credit Card Debt? 

While some people may not consider taking out a loan when deciding how to tackle credit card debt, personal loans have many benefits that make them an attractive option to a wide array of consumers. For starters, personal loan approval processes are typically more lenient than those of balance transfer cards that are more promotional in nature and geared toward certain demographics. 

As a result, consumers from a large spectrum of credit scores are eligible for personal loan offers featuring competitive APRs. A personal loan is also a great way to build up a credit score, as it adds a new type of debt to your credit mix while allowing borrowers to boost their scores through timely payments. 

On top of that, personal loans sometimes have fixed interest rates that are lower than the variable rates of most credit cards. While you will still have to pay interest when repaying a personal loan, it will be baked into the principal amount as an APR that also accounts for costs and fees. Knowing how much you will have to repay in full, without the worry of compounding interest charges, provides a good sense of peace of mind and also helps with budgeting your repayment plan into your monthly expenses. 

Finally, a personal loan also provides greater repayment flexibility through a wide range of loan terms (i.e., the length of time you have to pay the debt in full). With loan terms ranging from 24 to 84 months on Fiona, consumers can get matched with a loan offer that has a  repayment plan that works best for their unique situation. Borrowers interested in paying off the debt quicker and saving on interest can choose a shorter term, while those interested in lowering their monthly payment can opt for a longer repayment period, up to seven years.

While balance transfer cards are great, they also require consumers to pay off their debt during a specific period to benefit from a 0% introductory APR offer. Those who don’t could end up paying more in interest than they did on their original card. Personal loans provide the transparency of a fixed APR at the onset of the lending process. Using a search engine like Fiona, you can get matched with, search, and compare personalized loan offers and tackle high-interest credit card debt without the need for another credit card.