facebookIf I have credit card debt, is it better to get a loan from the bank to pay off the credit card debt knowing loan interest rate is lower than credit card interest rate? ? - Seedly

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Anonymous

10 Jun 2021

Credit Cards

If I have credit card debt, is it better to get a loan from the bank to pay off the credit card debt knowing loan interest rate is lower than credit card interest rate? ?

Discussion (13)

What are your thoughts?

Credit card debts is the worst debt one can have as it is highest interest loans from banks.

go for debt consolidation or secured bank loans if possible.

stop credit card expenditure, spend on must haves only n stop all wants.

debt free is the ultimate goal!

V

Victor

10 Jun 2021

Financial Service Consultant at AIA

It will be the lesser of the 2 evils

Loh Tat Tian

Loh Tat Tian

16 Jun 2019

Founder at PolicyWoke (We Buy Insurance Policies)

This has been answered before.

https://seedly.sg/questions/if-i-have-credit-ca...

MY take, you should not even need to look into this.

View 2 replies

Charmaine Ng

Charmaine Ng

15 Jun 2019

The Value Maximizer at @ Every Ma La Xiang Guo Stall

No. Also please evaluate how deep in debt you are right now.

If you are having credits and unable to pay off; stop looking for ways to pay it off first. Start looking at ways to cut your spendings first.

Suggestion:

  • If you're 1-3months of your salary in debt right now; immediate cut out unnecessary everyday luxuries + review monthly expenses (telcos etc.) to pay off the debt now. Don't bother looking at taking out loan for lower % interests; because they would have a one-time processing fee which would equate to your interest rates anyway (or a little more.. which the costs is insignificant considering you might snowball your debts anyway.)
  • If you're 4-6 months of your salary in debt right now; do the above; switch to a loan ONLY after evaluation. By evaluation I don't mean speaking to bankers who benefits from your business. I mean comparing different loans and speaking to bankers only to understand the product; not sign-on immediately. Ask Seedly community if you must; but by this time you should also be looking at discussion with family members to see if they could help out & 2nd income source to speed up your repayment.
  • If you're 7months of your salary and in debt. Contact CCS and register for an infotalk. You urgently need it and do not think about getting another loan to pay the first one. You will never cover the hole without getting proper knowledge of where you went wrong. Also in the talk you will hear more about the different types of options for you.

All the best!

Agree with Jonathan. Otherwise, you can look at debt consolidation services provided by the banks. A...

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