Did you know that on average Americans owe 6,375 dollars in credit card debt? According to experts, this number rose 3 percent from last year. The holidays are almost here.
And, you know what that means more shopping and booking that family trip we have been dreaming about. Don’t want to be a bummer, but you should set your own pay off plan to get rid of that annoying credit card debt. Have you considered loans with no credit check to pay off your credit cards?
If not, you should take a look at them. They’re a fast and effective solution to getting out of your monthly bills. Not sure how to do it?
We’ve you covered. We’ll tell you how you can use no credit check loans to lower or even eliminate your monthly credit card payments. Read on to start paying off your debt today.
Should You Consider Loans with No Credit Check to Pay off Your Credit Cards?
Are you drowning in your monthly credit card payments? Do you want to gain financial independence? Want to consolidate your payments without lowering your credit score?
If you answered yes to these questions, you should consider personal loans with no credit check to pay off your credit card debt. The process for these loans is easy and fast, which makes them a great option to consolidate your payments. But, don’t go running to your financial institution yet.
You should consider taking a no credit check personal loan if the interest rate will be lower than your current credit card rate. This might be a toss-up considering that many no credit check loans lenders charge a lot of interest.
According to experts, the average credit card interest rate is 16.71 percent. It’s possible that some of your credit cards charge the average interest rate but, others might be charging higher rates such as 28.99 percent. When you add your monthly interest expense, you may still get a better deal if you consolidate your credit cards by taking a no credit check personal loan.
Not sure how to use your personal loan to pay off your credit card debt? Here are 4 ways to use your loan funds to lower or eliminate your credit card debt.
1. Paying off Your Credit Card Balances and Making Only One Monthly Payment
Before contacting your potential lender, you should take a look at your finances. How much is your current credit card debt? Can you request a loan for this amount?
In some cases, you may be eligible for a loan to cover all your credit card balances. If your loan can cover all your balances, you will pay off your debt and only make one monthly payment. This payment should be less than your combined minimum payments before consolidating.
Your monthly payment may seem like a lot. But, this loan puts you on an accelerated path to financial freedom. Making only one payment helps you take charge of your finances and plan ahead by saving for a rainy day or even your retirement.
2. Consolidating Your Credit Card Debt to Lower Your Current Interest Rate
You may think your current credit card interest rates aren’t a lot. But, if you take a deep look at your monthly statements, you will notice that most of your minimum payment goes toward interest expense. If you stick to making these payments, it will take a long time to repay your credit card debt.
When you consolidate your credit card debt using no credit check loans, you pay off your debt faster while lowering your current interest. Before sending in your application, it’s important to research the interest rates available at your potential lenders. Look for a financial institution that can provide the funding you need while offering competitive interest rates.
3. Paying off Your Debt Sooner by Making a Lump Sum Payment to Your Credit Card
Some borrowers focus on paying off all their credit cards. Yet, the best approach in some cases is paying off some of your debt. Because your lender may deny your loan due to the requested amount.
If your debt balances are pretty high, you should consider making a lump sum payment to your largest credit card balance or the account charging the highest interest rate. This would lower your payment or even eliminate this debt. It will depend on the loan amount approved and your balances.
4. Increasing Your FICO Score by Lowering Your Debt Ratio
A personal loan with no credit check won’t lower your credit score because the lender won’t hard pull your credit. But, it can boost your FICO score. Financial institutions use this score as a guideline to extend credit.
Your debt ratio is one of the most important factors taken into consideration to calculate your FICO. If you use the funds from your personal loan to pay off your credit cards, you will lower your indebtedness or debt ratio. This increases your FICO score, making you eligible for more credit offers or even the mortgage to your dream house.
Are No Credit Check Loans Your Best Option to Eliminate Your Credit Card Debt?
Yes, loans with no credit check may be your best option to pay off your credit card debt. It will all come down to the amount you need to pay off your debt. Remember most lenders have a borrowing limit for no credit check loans.
Before applying, you should take a look at your finances and calculate the amount you need to borrow. All lenders have certain requirements the borrowers must meet. It’s recommended to research your potential lenders and check if you meet their requirements.
Look for lenders who are open to working with borrowers in your situation. Since the financial institution won’t check your credit, they will require you to submit evidence of your on-time payments, full-time employment, among other personal information.
Also, you should be ready to provide a checking account. Your lender will require one in order to be eligible for this loan.
Want to find the right no credit check loan to pay off your credit card debt? Read our article for your step by step guide to find the best financing today.
Here are some other articles that you may enjoy:
Do You Have Credit Issues? Here Are the Side Effects of Bad Credit
Bad Credit Business Loans- Do They Exist?
Here’s What It Takes to Apply for a Credit Card with Fair Credit
Lender Review: One Main Financial