A few weeks ago, just before school started, we talked about paying for those back to school expenses that often cost an arm and a leg. Now that the rush is over and those school clothes, shoes, and classroom necessities have been purchased, hopefully you are not feeling the stress of that spending. If you are, this week is for you. Today we talk consolidating debt after the back to school rush.
We often think, during the back to school season when buying those items on the list, that things will even out once the kids are back in the classroom. Unfortunately, year after year, that never seems to be the case and there are always lots of small odds and ends to pay off as well as those debts accumulated before school started.
If you paid for most of those expenses with your credit card, you are probably only feeling the pain right now. When the debt lingers in the form of credit card payments, making only the minimum payments will mean no end in sight and with the holidays right around the corner you may be tempted to only make those minimum payments and accrue more debt.
It can be tempting to turn to short term credit products like payday loans thinking you only need a small stop gap measure to get you through the bills. Our advice: don’t!!! Stay as far away from payday loans as possible. Sure, that $20 for $200 may seem like a good deal, but we promise, it isn’t.
Payday loans are very expensive, they don’t report to your credit report, and they have to be paid in full by your next pay period or you’ll just incur more sky high fees. Payday loans are nearly impossible to climb your way out of. This can lead to a cycle of borrowing multiple payday loans, costing you more than you actually borrowed in the first place!
The better option for consolidating debt is through a personal loan.
Did you know that a personal loan can be amortized over a short term? Even a few months of steady payments, minus the ability to use what you’ve already paid off, can save you huge in interest (compared to those credit cards). A short term personal loan is often the most viable way to consolidate these small debts to a single payment and to see them paid off quickly!
At Prudent, we are committed to helping our clients find the best financial solutions, the ones that save money and see debts eliminated before they become a problem.
Want to find out more? Call us today at 1-888-852-7647.