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HomeBlog Credit Card DebtI Owe $15,000 on Credit Cards That Have an Average Interest Rate of 15%. Should I Get a Debt Consolidation Loan?
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I Owe $15,000 on Credit Cards That Have an Average Interest Rate of 15%. Should I Get a Debt Consolidation Loan?

March 9, 2016 by National Debt Relief

As the following video explains this will depend on the type of loan you can get to pay off these credit cards. If you were able to get a personal loan at, say, 9% it could make sense.

A 48-month payoff

As you saw in this video, if you could pay $600 a month on those credit card debts it would take you 31 months to get rid of it and would cost you $3,097.97 in interest. If you were able to get a 48-month debt consolidation loan for $15,000 at an APR of 8.253%, your payment would be about $367.

That’s a savings of $233 a month.

Be aware that you’re basically trading time for money because it would take you 17 more months to pay off the loan.

Why a personal loan might not be your best optionwoman holding a credit card while looking at laptop

Notice that the example given above was based on getting a personal loan at 9%. The problem with this is that it’s very unlikely you could get a loan at this attractive an interest rate. Personal loans are unsecured loans as you’re not required to offer any collateral to secure them. This makes them much riskier for lenders. If you’re already having a problem with debt that would make you appear to be even riskier. So if you were able to get a personal loan it might have an interest rate closer to 14% than 9%.

A better option

Many people struggling with debt have found debt settlement to be a better option than a personal loan. This can be especially true if you owe that $15,000. The major reason for this is because debt settlement was created specifically to help people that are struggling to repay their credit cards and other unsecured debts – who are months behind on their payments and unable to get a personal loan.

How debt settlement works

When you sign up with a debt settlement firm it will take responsibility for managing your debts. Instead of paying your creditors you will make an affordable monthly payment to the settlement company. It will deposit this money into an FDIC insured trust account that you control. When a sufficient amount of money has accumulated in your account to settle one of your debts the settlement company will ask you to release enough money from your account to cover the settlement. Spoiler alert – debt settlement won’t get you debt free in just a few months or even a year. It generally takes anywhere from 24 to 48 months to settle all of a person’s debts – depending on how much they owe.

The other big plus of debt settlementwoman tearing off debt

Debt settlement has another big plus as it represents the only way to get credit card debts reduced. While there are other options for dealing with big debt such as getting that personal loan, consumer credit counseling or a balance transfer all of these merely move your money from one set of lenders to a new one. In comparison, when a debt settlement company settles with one of your lenders it will do so by offering a lump sum payment but for less than your balance. In fact, a good debt settlement company is often able to get debts reduced by 40% or even 50%.

Do the math

If you think that debt settlement might be a good option, you need to do the math before contacting any debt settlement company. Debt settlement companies are for-profit firms and generally charge a fee of anywhere from 15% to 25% of your total debt. Getting back to that $15,000 example a good debt settlement firm might be able to get that credit cards debt cut to $7500. Assuming you’re charged the maximum fee of 25% their fee would be $3750. Subtract that from the $7500 it’s saved you and you would still have a net savings of $3750, which would certainly make debt settlement a very good option.

If you’re struggling with credit card debt, there is help out there. Check out the best ways to reduce your debt without a debt consolidation loan at National Debt Relief

Do you qualify for debt consolidation?

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National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

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By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
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Easy National Debt Relief Caller: Nocona Transcribed WE 3/28/2021 Nocona: The call is recorded. Tell me a little bit about how you came across National Debt Relief and what made you decide to go through them over some of the other options out there. CRAIG: I did some research. And I liked what I saw and I liked some of the reviews that I saw. Nocona: And can you tell me a little bit about your initial contact with National Debt, how you felt about the customer service, the way they answered any questions you had? CRAIG: It's always been very good. Nocona: Tell me a little bit about what they were able to provide for you. Did they give you a timeframe or kind of layout what to expect? CRAIG: Yeah. They gave me specifics, which I really liked. Time off, proper expectations. Nocona: And about how long did it take to start seeing some debts get settled? CRAIG: Oh, gosh. I'd have to go back. I think maybe four months. Nocona: Okay. So not all that long? CRAIG: No. Three to four months. Nocona: And is there anything that you think National Debt could do to make the experience any easier or better for the customer? Anywhere you'd like to see changes made? CRAIG: No. Nocona: And any advice for people that are considering a program like this? Anything you think is helpful to know before you go in? CRAIG: I just think people have to ask all the questions, not be afraid of asking questions or voicing concerns and not moving forward until they're satisfied that it's a good program for them. Nocona: Based on the experience you've had with National Debt Relief, where would you rate them between a one and a five, a five means you definitely recommend them to others, a one means you're very dissatisfied? CRAIG: I'd do a 5. Nocona: Is it okay if we share your comments as a review on our website to help people that are considering their debt program options? CRAIG: Sure. Nocona: I have thepetersonz@outlook.com. Is that right? CRAIG: That's correct. Nocona: The call was recorded.

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