What Credit Score Is Needed For A Us Bank Platinum Visa?

Are you thinking about applying for the US Bank Platinum Visa?

The minimum recommended credit score for this credit card is 750.

US Bank Platinum card

How to Increase Your Chances of Getting Approved for US Bank Platinum Visa

Getting approved for a credit card requires a little planning. Most credit card offers require very good credit. When applying for new credit, it’s important to know your credit scores and what’s on your credit reports.

Credit card issuers want to see a strong credit history, steady income, and low credit utilization. If you’re using too much of your existing revolving credit, it’s a sign that you may not pay them back. It’s also important to make sure that you haven’t applied for too much credit in the recent past. Having too many credit inquiries can lessen your chances of getting approved.

Need help improving your credit score?

One of the best ways to improve your credit scores is by removing negative items from your credit report. Lexington Law can help you dispute (and possibly remove) the following items:

  • late payments
  • collections
  • charge offs
  • foreclosures
  • repossessions
  • judgments
  • liens
  • bankruptcies

They have over 28 years of experience and have removed over 7 million negative items for their clients in 2020 alone. So if you’re struggling with bad credit and want to increase the likelihood of getting approved for new credit, give them a call at (800) 220-0084 for a free credit consultation.

Does Having a Credit Card Balance Hurt Your Credit Score?

Follow these hints from people with credit scores above 800:
Finally, don’t worry too much about small fluctuations in your credit score. Your score can vary from month to month based on the balance you have at the time your creditor reports to the bureaus. Fluctuations are completely normal. Focus on making on-time payments and keeping your balances low, and you’ll build a healthy credit score.

How Your Credit Card Balance Affects Your Credit Score

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.

  • Payment history (35%)
  • Credit utilization (30%)
  • Average age of credit (15%)
  • Credit mix (10%)
  • Hard inquiries and new credit (10%)

That said, you shouldn’t worry about a balance showing up on your credit report. As long as your balances — both overall and on each individual card — stay below 30%, you’ll be able to build good credit.
There are five things that determine your credit score. These credit score factors break down as follows:
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Here’s where it gets a bit tricky. If you’re regularly using credit, a balance will probably show up on your credit report. That’s because you don’t control when your credit card company reports activity to the bureaus.
Source: thepennyhoarder.com
If your credit utilization ratio is 0% because you never use your credit cards, your score could suffer. When you’re not making regular credit purchases and you don’t have outstanding loans, you aren’t generating activity that’s reported to the credit bureaus. That’s harmful because payment history is even more important than your credit utilization.
You probably know that paying down debt is good for your credit score. But there’s a persistent myth about credit card balances and credit scores. Some people say that carrying a small balance from month to month somehow helps your credit score.

Should You Carry a Credit Card Balance?

That doesn’t mean the average person with a perfect score is carrying a 5.8% balance from month to month. When your creditor reports to the bureaus, they’re simply providing a snapshot of your account at that given moment. Even if you pay off your balance in full each month, it’s likely that your account will show that you’re using up part of your open credit.
There’s no benefit to your credit score when you don’t pay off your balance in full. You’ll also pay unnecessary interest, unless you’re taking advantage of a temporary interest-free window.
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  • Make every payment on time. The No. 1 habit of people with exceptional credit scores is that they never miss payments. One late payment will stay on your credit report for seven years.
  • Always keep your utilization below 10%. Most members of the 800 club pay off their balances in full each month, but many say they never let their balances climb above 10%.
  • Keep your oldest card open. As you build good credit, you typically qualify for better credit card rewards. But people with top-notch credit keep those old cards open and use them for a small monthly purchase. Credit scoring models favor customers who have long-term relationships with their cards.

The idea that carrying a balance helps your credit score is totally false. Read on to learn the facts about how your balance affects your credit score.

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For example, suppose you have a ,000 limit and a zero balance. Then you make a 0 purchase. If your creditor then reports to the bureau, you’ll have a 2% credit utilization ratio (,000/0 = 2%), even if the bill hasn’t come due yet.

How to Choose a Credit Card, the Right Way (Step by Step)

Credit card issuers often extend credit line increases to account holders who keep their card usage low and make monthly payments consistently.
Did you get approved? Congratulations! Be sure to take care of your new account by keeping your usage no more than 30% of your credit limit — if you do that, you may qualify for a line increase down the road.

1. See Where Your Credit Score Stands

With secured cards, you pay for credit. You put up a security deposit, usually at least 0, and then a credit card issuer extends you the same amount in credit. This route lets you prove you’re worthy of more credit, and the lender has nothing to lose if you don’t pay your bill.
Your score doesn’t have to be perfect to land a good credit card. But you’ll at least need a score in the good range to qualify for the top credit cards with the most sought-after perks.

Don’t Stop at Checking Your Score

It’s another possible tiebreaker. Welcome offers are perks you get just for signing up. It could be a statement credit worth hundreds or dollars, or enough miles to pay for a domestic flight. Read through your options.
If you aren’t approved, you should receive a written explanation in an email within a few business days or by mail, within a couple of weeks.
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Don’t Be Discouraged by a Poor Score

Use balance-transfer credit cards to pay off other credit card debt faster or to pay off a big purchase before the card’s normal balance-transfer rates and other fees kick in.
In case you ever need to get your hands on some cash in a hurry, and you don’t have enough on hand, you’ll need to know how much your credit card will charge you for borrowing cash. These are usually comparable to ATM fees, but some can be much more expensive.
The interest rates may be higher than average, and the credit lines may be modest, but cards intended to help build credit give account holders the opportunity to prove their creditworthiness.

2. Determine the Type of Card You Want

You can earn miles to pay for airfare when you use airline rewards credit cards. You can get cash back on dining out with a dining card, or on gas with a gas card, and so on. You’ll need a score that’s at least in the fair-to-good range to qualify for this type of card.

Credit-Building Cards

This maintenance fee is charged every 12 months on many credit cards, but not every credit card will have one. They can range from about to well over 0. However, you’ll come across many card offers that don’t include an annual fee for a set amount of time or include no fee at all.
Don’t abandon the idea of a credit card if your score is fair or even poor. A secured credit card could serve as the bridge needed to get you from being denied to approved.
Like to travel? Want peace of mind when you do? Be sure to review any potential card’s foreign transaction fee. It’s sort of like a cash-advance fee or ATM charge for making purchases in another country, and they can quickly pile up if you aren’t careful.

Low-Interest Cards

After you’ve learned how to choose a credit card, reviewed your credit report and selected a few finalists, it’s time to apply for a credit card.
Keep in mind: applying for credit cards requires a hard inquiry into your credit report, which could cause your credit rating to take a mild or moderate temporary hit.

Balance-Transfer Cards

There are credit cards for every type of financial situation. While the number of credit cards out there may seem overwhelming and hard to count, they all broadly fall into five categories: credit-building, low-interest, balance-transfer, rewards and business.
Once you’ve figured out which type of credit card you want, and you know what you might qualify for, it’s time to compare your top choices head-to-head. And to do that, you’ll need to compare these key credit card features:

Rewards Cards

These cards offer low-interest rates and may not charge you an annual fee, but only for an introductory period that’s usually 12 to 48 months long.
Source: thepennyhoarder.com

3. Compare the Best Matches

Who doesn’t love to rack up loyalty points or earn cash rewards? A rewards credit card can help you do just that.

Annual percentage rate (APR)

Use a reputable site like Credit Sesame to review options and apply, or go to the credit card on the company’s website. If you’re approved, you should get a response in a few minutes to a few hours.

Balance-Transfer Fees

Typically requiring a credit score in the good-to-excellent range, low-interest cards are great for the long haul.

Late Fees

Check your credit history to see what accounts are impacting your score — and to make sure there are no errors hurting your credit profile. If there is a mistake, you can dispute it and potentially have your score corrected.

Rewards

While you should always aim to pay your credit card bill on time, it’s still important to know how much dirt you’ll get shoveled with if you fall behind on payments. Beware, and don’t get buried in debt.

Sign-Up Bonuses

They offer highly competitive interest rates, potentially saving you hundreds or even thousands of dollars when compared to cards with higher interest rates.

Annual Fees

These include the secured credit card mentioned above, as well as those intended for students and individuals who, for better or worse, haven’t established their credit yet.

Cash-Advance Fees

This is the amount of interest you’ll pay on any balance on your card. The average APR in 2021 is around 16%, though rates could be as low as half of that figure or double (as high as 36%), depending on your credit profile.

Reporting

Not every credit card will report your on-time payment to the three major credit bureaus.

Foreign-Transaction Fees

With enough on-time payments, you could get a credit limit and eventually be pre-approved for standard credit cards (more on secured credit cards in the next section).

4. Apply for Your New Credit Card

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Even if there are no mistakes on your report, you may find opportunities to improve your credit score with a service like Credit Sesame.
When choosing a credit card, you want one that suits your needs.
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It can feel overwhelming at first, but it gets easier once you take a look at your credit profile to get a bird’s-eye view of your current financial situation.  Here, we’ll help you learn how to choose a credit card — we’ll highlight the key features to look out for, so you can find a credit card that feels like it was tailored to you.

In 2 Minutes, Credit Sesame Can Help Improve Your Chances of Getting a Home in This Market

If you’ve been trying to buy a house in this chaotic pandemic housing market, you know you could lose an opportunity from right under your feet in an instant.
But there’s one thing that you do have control over — and that’s making sure you get approved for a mortgage, at a rate you can afford. Home sellers want to sell to someone who won’t give them any trouble during the closing process — and having a pre-approval for a mortgage loan is a great selling point. But without a good credit score, you might not stand a chance.
Source: thepennyhoarder.com
And with a poor credit score, you might not get a pre-approval at all — meaning just putting an offer on a home is out of the question.

A Bad Credit Score Can Deny You a Pre-Approval — Or Cost You Thousands

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Ready to stop worrying about money?
A higher interest rate on your mortgage could cost you tens of thousands of dollars more over the life of your loan. In just 90 seconds, Credit Sesame will show you your free credit score, plus what’s impacting it. It’ll even tell you if there are any mistakes on your credit report — one in five people have one, according to the FTC. Then, they’ll give you customized advice to get your credit score back on track, which could make you more appealing to lenders — and home sellers.
Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.
The market is as competitive as we’ve ever seen it, and cash buyers are snatching up houses left and right. Bidding wars start within hours of a house being listed, and it’s not uncommon to see people offering ,000 over asking price. Some things are just out of your control.
Make sure your dreams of homeownership don’t get squashed by bad credit. Get your free credit score here (it only takes about 90 seconds) and see how much you could improve your score. You could be that much closer to getting the keys to your new home.
Kari Faber is a staff writer at The Penny Hoarder. <!–

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60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.

Credit score needed for the Citi Double Cash Card

The Citi® Double Cash Card is one of today’s top cash back credit cards – and for good reason. The card offers 1% cash back on every purchase, plus another 1% cash back when you pay off your purchases.

“As a busy dog mom with a job and too many hobbies, I love that I can use my card anywhere without having to stop and plan how to get the best rewards rate,” personal finance writer Meredith Hoffman says, explaining why the Citi Double Cash card is the best card in her wallet. “In my first year with the Double Cash card, I earned $187 in cash back on everything from hair appointments to grocery shopping and gas.”

If you’re thinking about applying for the Citi Double Cash card, you’re probably wondering what credit score is needed for your card application to be successful. In most cases, having a good credit score means taking the time to build good or excellent credit before applying – although even people with excellent credit can have their applications denied, depending on how they’ve used credit in the past and how much new credit they’ve applied for recently.

Want to take advantage of all the benefits the Citi Double Cash Card has to offer? Here’s what you need to know before applying.

What credit score do I need to get the Citi Double Cash?

While there’s no credit score range that guarantees your chances for approval, our research indicates that you’ll be most likely to be approved for the Citi Double Cash card if your credit score is good, very good or excellent.

What does it mean to have good or excellent credit? If you’re using the FICO credit scoring model, you’re going to want a credit score between 670 and 850. If you’re using the VantageScore model, your credit score should be between 700 and 850. Here’s a quick rundown of how each credit scoring model tracks credit ranges:

Credit Score Ranges FICO VantageScore
Credit rating Score range Credit rating Score range
Exceptional 800–850 Excellent 781–850
Very good 740–799 Good 661–780
Good 670–739 Fair 601–660
Fair 580–669 Poor 500–600
Very poor 300–579 Very poor 300–499

How can I improve my score to get this card?

If you don’t have a good enough credit score for the Citi Double Cash card, here are some tips to help you improve your credit score quickly:

Make on-time payments, every time

The single best way to boost your credit score is by making on-time payments – every time – on existing credit lines.

Payment history makes up 35% of your FICO credit score, making it the most important factor in your credit file. If you have missed payments on your record, it’s time to change your bill-paying habits to ensure that all future payments go out on time.

Some people use credit card autopay to keep them from missing payments. Other people set up mobile alerts to remind them when their credit card bill is due.

If you want to improve your credit, you need to build a history of on-time payments. Even if you can only make the minimum payment, make sure it goes out on time.

Pay down old debt

Ready for a second step to help you get the credit score needed for the Citi Double Cash card? Pay off any existing credit card debt.

Under the FICO scoring model, your credit utilization ratio makes up 30% of your credit score, making it the second-most important credit scoring factor after your payment history.

Your credit utilization ratio is determined by comparing your available credit to your current debt. The best way to lower your credit utilization ratio and improve your credit score is by paying off your credit card balances.

However, you can also lower your credit utilization ratio by opening a new credit card and increasing the total amount of credit available to you. Some people use balance transfer credit cards as a way to take advantage of both credit-boosting opportunities at the same time, increasing their available credit and paying off old balances simultaneously.

Check your credit report

Here’s one more way to improve your credit score for the Citi Double Cash card: Check your credit report for errors. Many people don’t realize that mistakes on their credit report can lower their credit score – and that taking a few minutes to review your credit report and dispute any errors is an easy way to improve your credit score quickly.

What can I do if Citi declines my application?

If Citi declines your application for the Citi Double Cash credit card, you have a few options. First, you can build your credit score and re-apply for the Citi Double Cash card once you have established good or excellent credit.

You may also want to consider applying for a different Citi credit card, especially if you want to take advantage of Citi credit card benefits like the ability to earn ThankYou points on every purchase.

If you’re thinking about using a balance transfer credit card to pay off old debt and boost your credit score, the Citi Simplicity® Card offers 12 months of 0% intro APR on purchases and 21 months of 0% intro APR on balance transfers completed within the first four months (after intro period, regular 14.74% to 24.74% variable APR applies). This gives you over a year to pay off transferred balances before they start to accrue interest – and plenty of time to work on building your credit score.

What if you’ve already built the credit score needed for the Citi Double Cash and Citi still declines your application? Believe it or not, you can be denied for a credit card even with excellent credit – and in many cases, it has to do with other application factors such as income level, current credit card balances and the number of credit cards you’ve opened in the past.

Credit card issuers are less likely to approve people who churn new accounts for their sign-up bonuses, for example – and Citi, like many credit issuers, has application restrictions designed to prevent people from taking out too many new credit cards at once. If you’re turned down for these reasons, you may just need to give it some time before successfully applying for a new card.

Final thoughts

What credit score is needed for the Citi Double Cash Card? In most cases, having a good or excellent credit score will make you a prime candidate for approval.

If you want to test your approval odds before applying, try using a service like CardMatch™ to check for prequalified credit card matches and personalized offers. Otherwise, try building your credit until you have a FICO credit score between 670 and 850 – because our research indicates that’s the best credit score range for the Citi Double Cash Card.

Source: creditcards.com

What Credit Score Do You Need to Buy a Car in 2021?

Because a credit score is an important indicator for determining a consumer’s creditworthiness when buying a car, those with excellent credit histories tend to have an easier time borrowing money on favorable terms compared to those with lower credit scores. However, industry data shows that high-risk borrowers remain viable candidates for auto loans. In other words, there is no universally defined credit score needed to buy a car.

Read on to learn how your credit score can affect buying a car, plus some tips for purchasing a car with a lower credit score.

What FICO® Score Do Car Dealers Use?

There are a few different scoring models that car dealers may use for determining a customer’s credit score. They may use the FICO Auto Score 10 , an industry-specific model featuring a score range from 250 to 900. The auto industry also may use VantageScore 3.0 or the newer VantageScore 4.0 model, which has a score range from 300 to 850.

No matter which scoring model is used, a bad credit score falls on the lower end of the range and a good credit score sits on the higher end of the range.

What Is the Minimum Credit Score To Buy A Car?

There may not necessarily be a minimum credit score required to buy a car. Consumers with deep subprime credit scores from 300 to 500 have obtained financing for new and used vehicles in the second quarter of 2021, according to the credit bureau Experian’s State of the Automotive Finance Market report for that period. Although the percentage of borrowers in this category is very low, this indicates that even those with the lowest credit scores still may have access to auto financing.

Average APR by Credit Score Ranges

Consumers from all credit score categories have obtained auto loans in 2021, but car buyers with excellent credit histories tended to secure the lowest annual percentage rate (APR) financing, according to Experian’s Q2 report. When assessing what is a good credit score to buy a car, Experian’s data confirms that consumers in the super prime and prime categories obtain the lowest interest rates on average for financing.

Quarterly financing data on new vehicle purchases in the second quarter of 2021 shows the following average APRs by credit score ranges:

•  Deep subprime (300-500): 14.59%

•  Subprime (501-600): 11.03%

•  Near prime (601-660): 6.61%

•  Prime (661-780): 3.48%

•  Super prime (781-850): 2.34%

How to Buy a Car With a Lower Credit Score

Obtaining a loan to purchase a new or used vehicle when you don’t have great credit can be cumbersome, but it’s not impossible. Here are some ways a consumer with poor credit may be able to obtain auto financing:

Make a Large Down Payment

Offering a large down payment on a vehicle purchase may allow car buyers to obtain more reasonable rates and better terms for financing, resulting in more affordable monthly loan payments. By putting more money down at the time of purchase, lenders also may view the loan as less risky, thus increasing your odds of approval.

Get Cosigner Assistance

Buying a car with the assistance of a cosigner is another way to potentially bolster your chance of securing favorable financing. A cosigner agrees to share the responsibility of repaying the loan, effectively promising the lender that if you don’t make the payments they will. If the cosigner is creditworthy, it puts the buyer in a much better position to obtain financing than going it solo.

Consider a Less Expensive Car

Especially if you are buying a car with bad credit, it is important to know how much you can realistically afford to spend — and then stick to that budget, even if the dealer tries to upsell you. Additionally, finding a less costly car will reduce the amount you need to borrow, and it may be easier to get approved for a smaller loan amount than a larger one.

Benefits of Good Credit When Buying a Car

The benefit of a good credit score when buying a vehicle is that you may secure lower interest rates compared to consumers with poor credit. Unless a consumer buys a vehicle outright with cash or receives 0% APR financing, the consumer will eventually face monthly principal and interest payments until they’ve paid off the loan balance in full. Auto financing terms may vary in length, with some maturing at 60 months, 72 months or 84 months.

Car loans with a high APR may cause consumers to pay a long-term premium above and beyond the actual sales price of the vehicle.

How to Monitor and Keep Track of Credit Scores

There are a number of ways you can check your credit score, including through your credit company or another financial institution where you have an account, as well as through a credit service or credit scoring website. Contrary to what you may expect, your credit report does not include your credit score, though it does provide valuable information about your credit history and debts, which is why it can still be helpful to read over your credit report before making a major purchase like a car.

Credit scores can fluctuate over time depending upon financial circumstances, and credit score updates occur at least every 45 days. That’s why it’s important to take a look at where your score stands right before you begin the process of car shopping.

Also keep in mind that it’s common for credit inquiries to occur when you’re shopping around to see what auto loan terms you qualify for. While soft inquiries don’t affect your credit score, hard inquiries, such as those that happen when you’re comparing rates for an auto loan, can ding your score. However, most major credit scores will count multiple car loan inquiries made within a certain period of time — typically 14 days — as one inquiry.

What’s Expected in 2022?

Based on the trends outlined in Experian’s Q2 report for 2021, prime borrowers with good credit in 2022 may continue shifting away from used vehicles in favor of new vehicles. Experian’s research also shows that subprime financing remains at near-record lows, with just a fraction of car loans in 2021 going to consumers in the deep subprime risk category. These trends could continue into 2022.

The Takeaway

While it is possible to buy a vehicle with bad credit in 2021, consumers in the subprime or deep subprime risk categories may want to explore ways of improving their credit scores to help secure financing with more favorable terms. As far as what credit score you need to buy a car, any score is potentially sufficient for obtaining financing.

If you want to check your credit or work to improve your score before buying a car, SoFi Relay is a user-friendly app that allows you to easily monitor and keep track of your credit score.

Stay on top of your credit score with weekly updates.

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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’swebsite .
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
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How to Use a Personal Loan for Loan Consolidation

If you have multiple loans or credit cards with high interest rates, you might feel like you are continually paying interest and not making much headway on the principal of the debt. Consolidating those debts into one loan, ideally with a lower interest rate, can be one way to reduce your monthly payments or save on interest. Using a personal loan to consolidate debt can be one way to accomplish this goal.

This guide tells you everything you need to know about how loan consolidation works, what types of loans benefit from consolidation, and when to start the consolidation process.

What Is Loan Consolidation?

Loan consolidation, at its most basic, is the process of combining multiple debts into one. Usually, this means using a new loan or line of credit to pay off your existing debts, consolidating your multiple payments into one.

For example, imagine you have the following debt: $5,000 on a private student loan, $10,000 in credit card debt on Card A, and $10,000 in credit card debt on Card B. Your private student loan may have a high interest rate, and your credit card interest rates probably aren’t much better. You owe a total of $25,000, and each month you’re making three different payments on your various debts. You’re also continuing to rack up interest on each of the debts.

When you took out those loans, maybe you were earning less and living on ramen you bought on credit, but now you have a steady job and a good credit score. Your new financial reality means that you may qualify for a better interest rate or more favorable terms on a new loan.

A personal loan, sometimes called a debt consolidation loan, could be one way to help you pay off the $25,000 you currently owe on your private student loan and credit cards in a financially beneficial way.

Using a debt consolidation loan to pay off the three debts effectively condenses those debts into one single debt of $25,000. This avoids the headache of multiple payments with, ideally, a lower interest rate or more favorable repayment terms.

What Types of Loan Consolidation Are Available?

There are different types of loan consolidation depending on your financial circumstances and needs.

Student Loan Consolidation

•   If you have more than one federal student loan, the federal government offers Direct Consolidation Loans for eligible borrowers. This program essentially rolls multiple federal student loans into one. However, because the new interest rate is the weighted average of all your loans combined, it might be slightly higher than your initial interest rate.

•   You may also be able to consolidate your student loans with a personal loan. If you’re in a healthy financial position with a good credit score and a strong income, among other factors, a personal loan might give you more favorable repayment terms, including a lower interest rate or a shorter repayment period.

•   Consolidating federal student loans may not be right for every borrower. There are some circumstances in which consolidating some types of federal student loans may lead to a loss of benefits tied to those loans. It’s not a requirement to consolidate all eligible federal loans when applying for a Direct Consolidation Loan.

Credit Card Consolidation Loan

If you’re carrying balances on multiple credit cards with varying — and possibly high — interest rates, credit card consolidation could be one way to manage that debt.

Credit card loan consolidation is the process of paying off credit card debt with either a new, lower-interest credit card or a personal loan that has better repayment terms or a lower interest rate than the credit cards. Choosing to consolidate with a personal loan instead of another credit card means potential balance transfer fees won’t add to your debt.

General Loan Consolidation

If you have multiple debts from various lenders, perhaps some credit card debt, some private student loan debt, and maybe a personal loan, you may be able to combine these debts into a single payment. In this case, using a personal loan to consolidate those debts would mean you would no longer have to deal with multiple monthly payments to multiple lenders.

Why Consider Loan Consolidation?

There are many reasons to consider loan consolidation, but here are some to consider:

•   You want to be a minimalist. Did you join in the “pandemic purge” during this past year and a half? If your home looks less cluttered and you’d like your finances to match, you might be thinking about financial decluttering by consolidating some of your high-interest debt into one personal loan that has a lower interest rate or terms that work better for your budget.

•   Your financial circumstances have improved. Maybe you spent some time living off student loans to finish your degree, and now you’ve started your dream job. You have a steady salary and you’ve taken control of your finances. Because of your financial growth, you may be able to qualify for lower interest rates than when you first took out your loans. Loan consolidation can reward all that hard work by potentially saving you money on interest payments.

•   You’ve got sky-high credit card rates. If thinking about the interest rate on your current credit cards makes you want to hide under your desk, consolidating those cards with a personal loan may be just what you’re looking for. High interest rates can add up over the time it takes to pay off your credit card. Using a personal loan to consolidate those cards can potentially reduce your interest rate and help you get your debt paid off more quickly.

Are There Downsides To Loan Consolidation?

Using a personal loan to consolidate debt may not be the right move for everyone. Here are some things to think about if you’re considering this financial step.

Potentially High Interest Rate

Not everyone can qualify for a personal loan that offers a lower interest rate than the credit cards you want to pay off. Using a credit card interest calculator will help you compare rates and see if consolidating credit cards with a personal loan is worth it for your financial situation.

Fees May Apply

Looking for a lender that offers personal loans without fees can help you avoid this potential downside. Some lenders, however, do charge fees on personal loans. They could include application fees, origination fees, or prepayment penalties.

Recommended: Find out how a balance-transfer credit card works.

Putting Your Assets at Risk

If you choose a secured personal loan, you pledge a particular asset as collateral, which the lender can seize if you don’t pay the loan according to its terms.

Possibility of Adding to Your Debt

The general idea behind consolidating debt is to be able to pay off your debt faster or at a lower interest rate — and then have no debt. However, continuing to use the credit cards or lines of credit that have zero balances after consolidating them into a personal loan will merely lead to increasing your debt load. If you can get to the root of why you have debt, it may make it easier to remain debt free.

The Takeaway

Putting a stop to the revolving debt cycle could help place you in a better situation for future financial goals you may have. A personal loan is an installment loan, so there is a fixed end date, and if it’s a fixed-rate loan, monthly payments will remain the same for the life of the loan.

If you’re thinking about consolidating credit card or other debt, a SoFi Personal Loan is one option you may want to consider. With fixed rates and no fees, you may be able to pay off other debts with lower interest rates than credit cards or in a shorter amount of time.

Learn more about unsecured personal loans from SoFi.


SoFi Loan Products
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SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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Source: sofi.com