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Personal Loans vs Balance Transfer Credit Cards

Should I request a personal loan or look for a balance transfer offer?

The coronavirus pandemic and subsequent recession have left many Americans with less income. There are many reasons why you might have less income right now:

  • Job loss
  • Furloughed
  • Reduced salary
  • Loss of freelance work or clients
  • And more

While the government issued stimulus might have helped you some, many Americans are still struggling financially. Personal loans are growing in popularity among borrowers, because their quick and easy. You can use a personal loan to cover just about any cost, and you can borrow between $1,000 and $30,000 depending on your credit score and income. Another popular financial tool is a balance transfer credit card. There are credit card companies that offer 0% introductory APR and no balance transfer fees. Unfortunately, these credit card offers are harder to come by since the pandemic has impacted the economy. Learn more about each financial tool to find out which is the better choice to cover your expenses.

Personal Loans

Personal loans are a great way to consolidate debt. If you have high interest debt from credit cards, payday loans or other loans, you can use a personal loan to consolidate them. By consolidating your debt, you will have one monthly payment, which makes it easier to manage your debt. You could also secure a lower interest rate, as personal loans tend to have lower APRs than credit cards. Other uses for a personal loan include home repairs, auto repairs, tuition, and more. A personal loan is an unsecured loan, which means it doesn’t require collateral. While secured funding like a home equity loan can provide a lower interest rate at times, you could lose your home if you fail to make repayment. Personal loans do come with fees, so it’s important to consider what you will owe overall when you borrow.

Balance Transfer Credit Cards

Unlike personal loans, a balance transfer credit card can come with a 0% introductory APR. That means that you don’t have to pay interest on expenses that rollover from month to month during the introductory period. Each balance transfer credit card is different, with different introductory periods, but you could see no interest for anywhere from 6 to 18 months. A 0% balance transfer credit card is a good option if you can payoff your debt within the introductory period. Unfortunately, few credit card companies are offering balance transfer credit cards during the pandemic. In addition, you can only use a balance transfer credit card to consolidate credit card debt, and not other types of debt.

How to find a personal loan.

If a personal loan is the best option for you, you can apply for a personal loan online. BrighterPays is a personal loan matching service that helps borrowers find competitive rates. Simply request your personal loan from our site and tap into our lender network. You will receive an approval decision in minutes. If approved, funds are deposited into your account in as soon as one business day.

This post is not intended to be a solicitation for a loan. BrighterPays provides these blogs for entertainment and informational purposes only. Remember to consider all your financial options before making any decisions related to credit.