The holidays have come and gone. You may be feeling a bit relieved that all the seasonal hustle and bustle is over. Sure, it may be a bit cold outside and work is back in full swing, but things are looking good with your New Year’s resolutions and you’re feeling optimistic and energized.
Then you receive your January credit card bill. Whoa, the new balance is much higher than you expected. As you go down the list of purchases on your statement you ask yourself, “Did I really buy all those things and spend that much?” You also notice the available credit on your credit card is pretty low. You have some big purchases coming up and were planning on using your credit card to pay for them, but now you no longer have enough available credit to pay for everything as planned.
“How am I going to pay off my credit card this month?” you ask yourself. With average credit card APRs over 16%, and many exceeding 20%, you know if you don’t pay your balance in full you’ll be hit with a hefty finance charge, which will be added to your outstanding credit card balance. And even worse, if you’re late making the minimum payment that’s due, you could be hit with a penalty APR, which can be as high as 29.99%.
This is where a personal loan can help. Unlike a credit card, which is a revolving line of credit, a personal loan is an unsecured loan that doesn’t require any collateral, such as a car or house. Personal loans come with a specific repayment period, usually between 1 and 7 years. Fixed interest rates are more common than variable interest rates, and some lenders will offer you a choice.
The main reason people take out personal loans is to pay off existing debt, such as high interest rate credit cards or loans. Other common reasons include making major purchases, for home improvement projects, for special occasions like weddings, to take a vacation, and to pay off medical bills.
Tip: If you need money for college or want to refinance your existing student loans, we strongly encourage you to apply for a private student loan or student loan refinancing. The interest rate on private student loans and student loan refinancing are typically less than on personal loans and there are more repayment options for student loans and student loan refinancing.
Personal loans can range from as little as $1,000 to as high as $100,000. APRs vary widely among lenders and are based on the borrower’s (or co-signer’s) credit history, annual income, repayment term selected, and type of interest rate chosen. Some personal loans even come with money saving automatic payment discounts and loyalty discounts. You can see our current partner rates and borrower benefits here.
Tip: Some lenders charge upfront fees, which add to the total cost of the loan, so be sure to take that into account before choosing a lender.
A really nice feature for personal loans is how quick and easy the process can be. If you submit a completed loan application, you can receive a decision in a matter of minutes, and if approved, receive funds in your bank account as soon as the next business day, provided your application has no typos or errors.
Now that the holidays are over, you may be suffering from the post-holiday credit card blues. If so, check out a personal loan from U-fi’s partner. It just may be what the doctor ordered.