If you
have credit card or other debt with rates of 15% or higher the absolute fastest
and most effective way to lower the interest you pay is to apply for a balance
transfer, with a 0% rate.
Even if you can’t pay it off during the intro period, you’ll be
able to roll it over to another bank with a new offer when the promo is up as
long as you keep your credit in strong shape.
You can read our guide
to balance transfers to learn
about their pros and cons.
But a balance transfer isn’t for everyone, especially if your
credit score isn’t perfect or if you need to borrow cash.
A personal loan with a set payoff period a few years from now is
often the next best thing with these advantages:
- One monthly payment
- A set rate
- You don’t need absolutely
perfect credit
- You can check your rate without
touching your score
There are more attractive deals than ever thanks to some new
online lenders and you can see sample rates below for excellent credit and good
credit.
Tip: Apply
for several loans to check rates. You can apply to each personal loan company
separately.
Some personal loan providers let you check the rate you’ll get
without impacting your score, unlike credit cards.
They’ll do a ‘soft pull’ with your Social Security Number so your
best plan is to give your information to several of them and see who gives you
the best rate. You can use our new personal loan tool to compare interest rates from
multiple companies at once.
Once you get rates, put them in our Balance Transfer vs
Personal Loan calculator to
see how they compare on interest paid and time to paying off your debt.
Why is this a good way to save?
Banks don’t care much for personal loans because the lower rates
earn them less profit than credit cards.
Fortunately, some new companies believe you should be able to get
a competitive rate without dealing with credit card intro offers, even if your
credit isn’t perfect.
They’re doing it by lending online only without the overhead of
branches.
They pass the savings on to you through better rates, and you can
check up on them below.
Personal loans for Excellent Credit
The following providers are for you if you want the absolute
lowest possible rates that reward a record of no late payments and good income,
even though you have some high rate debt you want to clean up.
Unless you get a rate of 5% or less, you’re probably better off
with balance transfer deals, but the convenience of a fixed payment and walking
away from credit cards makes personal loans appealing.
SoFi*
Sofi offers some of the best rates available if you’re looking to
refinance your credit card debt. You’ll need to have a pristine record of
paying your bills on time, but they’re willing to offer rates that are very
competitive, even below 5%.
Sofi’s believes if you’ve graduated college or went to grad school
you’ll be a more responsible borrower, so they may be more likely to give you a
better rate, even if your credit history is limited.
For example if you have $10,000 in credit card debt, good income,
and great credit, their best rate could save you as much as 0% balance transfer
deals once you factor in the fees for each.
What we like best about SoFi is that they offer no origination fee
and no prepayment penalty. If you think you may be able to pay off your loan
earlier (or want the flexibility to do that), SoFi is the only lender we
reviewed that charges no fee at all. Given their very low rates, we think
anyone with good credit should start with SoFi first, and then compare their
offer to the rest of the providers.
Rates: 5.50% -10.49%, fixed, with AutoPay. You can also
select a variable interest rate. With AutoPay, the rates are from 4.28% –
8.78%. Rates are based upon 1-month LIBOR and are capped at 10.99%.
Upfront fee: 0% – No origination fees, no prepayment fees and no
balance transfer fees
Amount: $5,000 – $100,000
Period: 3 – 5 years
Available states: All states except Tennessee and Nevada.
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