Credit Card Loan: Balance Transfer Vs. Credit Card Debt Loan

The first step towards clearing excessive credit card debt is through Credit card debt consolidation. Getting a credit card debt loan is one way of consolidating credit card debt. With so much hype surrounding balance transfers, credit card debt loans are rarely talked about. However, one plausible option for paying off credit card debt is by getting a credit card debt loan.


4 Things You Should Know About Credit Card Debt Loans:

1. A credit card debt loan, simply put, is a loan of low interest offered by banks and other financial institutions to clear off your high interest credit card debt. The credit card debt loan, once approved, is expected to be paid back in monthly installments as agreed by you and the credit card debt loan lender.

2. The same principles that apply to balance transfers also apply to credit card debt loan. Like balance transfers, a credit card debt loan enables you to move from one or more high interest credit card to a low interest one.

3. Credit card debt loans are usually unsecured loans. This means that such loans do not require any kind of collateral or security. However, credit card debt loans for people with bad credit are usually secured loans. If you have a bad credit rating, these secured credit card debt loans will require that you pledge valuable assets or properties in exchange for the loan -pending the time that the credit card debt loan will be refunded.

4. Getting an approval for a credit card consolidation loan is dependent on your credit rating. It is very difficult – not impossible - to obtain a credit card debt loan with bad credit.


So, Balance Transfers Vs. Credit Card Debt Loan…Which Is Better?

The objectives of a credit card debt loan are quite similar to that of balance transfers. However, a credit card debt loan is a more effective means of closing up credit card accounts that have being the source of your credit card debt problem. This is not the say that balance transfers aren’t as effective. Balance transfers do have certain benefits that cannot be enjoyed with a credit card debt loan.

Based on your current financial situation, it is really up to you to decide what method of consolidating credit card debt will work best for you