Why I Got a Personal Loan to Consolidate My Debt
2019 was a big year for me. I opened my first credit card in ten years. You know, to help with some moving expenses, buy a brand new washer and dryer, and even cover a hotel stay when I took a weekend trip. At the time I opened my card, I had a 0% interest for 14 months promotion. I thought, ‘That’s a great deal! I’ll definitely pay it off before a year from now’.
But the last time I logged into my credit card app, the outstanding balance was $2,368. You might not think that’s a lot if you know that the average credit card debt being carried is $6,849*. But that was a large amount for me, especially when I was budgeting $200 a month for my credit card bill. My monthly interest has been about $50.
When I started doing the math I realized I would not be paying off this card even in the next two years. The interest would just keep eating into what I could comfortably budget. I knew there had to be another way.
I Started Looking at Debt Consolidation Options
Here’s what I knew I was looking for:
1. A lower interest rate
2. The ability to pay it off in two years
3. Kept within my current budget range of $200 or less
I looked into my credit union’s Any Reason loan. It’s a personal loan that you can use for lots of different things, like: paying for school expenses, renovation costs, or debt consolidation.
The current rate was less than half the rate my credit card charged (at the time, my CC interest was 24% APR* and the personal loan was 7.99% APR with my current credit score).
Before I applied, I checked My Offers on my Together CU Mobile App to see if I was pre-approved for this loan and I was! Being pre-approved meant I could skip the application and they didn’t need to pull a new credit report, which is a big win.
The Process of Applying for a Personal Loan
I had the option of applying online or in person. Because this was my first time applying for a personal loan, I went to my branch. (Editorial note: I work directly above a Together Credit Union branch. If taking time to visit a branch isn’t convenient, you can apply online! I looked at this option afterwards and it’s a very simple process.)
My personal service counselor, Cindy, was very friendly and explained everything to me before we applied. Because I was pre-approved for more than what I was asking, she made sure to let me know the application will be for full amount, but we can adjust the amount and term of the loan once the Loan Servicing Department makes the final approval.
What Did I End Up Paying for the Personal Loan?
My final monthly payment breakdown was $108 a month for 24 months *celebrate emoji*. I cut my monthly payments in half, saved money on interest, and now I know exactly when I’ll have that loan paid off.
The Personal Loan Experience Broken Down
Here are the steps of applying for personal loan from beginning to end:
— Submit application online or in person
— The application is reviewed by an underwriter for approval
— Comes back to your branch representative and personalize the amount and term of the loan
— Sign documents
— For debt consolidation, choose whether you want to receive the funds in your account, or have your representative pay off old debts directly on your behalf
Don’t let money get in the way of your plans.
I knew a personal loan was the best option for me, but your debt consolidation resolution may be different! Take our quiz to find out which debt consolidation tool might be your perfect match.
We’re here with you. Here for you.
At Together Credit Union, we believe money shouldn’t get in the way. You’ve got plans and we’d love to help get you there.
