Patriot Funding’s personal loan offers are a bait and switch scam. Patriot Funding has begun flooding the market with personal loan, debt consolidation and credit card relief offers in the mail with the website My Patriot Funding. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect.
The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2020 Reviews, the personal finance review site, has been following Patriot Funding, Georgetown Funding, Credit 9 Loan Reviews, and others.
Credit cards are an excellent way of earning rewards and points while spending. Many people use them in various ways, for instance, for paying medical bills, miscellaneous shopping expenses, buying a car, etc. However, if you are not careful, they can land you in deep trouble. Credit card debt is becoming an increasingly rampant problem for everyone worldwide, especially after the adverse impact that the COVID-19 pandemic has had on the economy, forcing many to need coronavirus credit card relief.
As a result of the pandemic, many people have been struggling to pay off their credit card debts in efficient ways. One strategy to pay off credit card debt as quickly as possible is through the use of obtaining personal loans. This strategy involves consolidating your debt and paying off multiple credit card debts all at the same time.
Personal loans can be an excellent alternative as it has many benefits. If you are fighting a battle against credit card debt, here are five reasons why you should consider paying it off using personal loans.
Be careful not to fall for debt consolidation loan scams.
1. Lower Interest Rates
The most apparent benefit of using personal loans is that the interest rates with personal loans are typically much lower than credit cards. For example, the average interest rate with personal loans is 9.5%, whereas credit cards’ interest rates are at 14.52%.
One personal loan can help debtors pay multiple credit card debts simultaneously. Thus, by obtaining a personal loan, you will be paying all of your credit card debt in one go and not have to pay extremely high-interest rates per month either. It saves you the money you have to pay per month, as you will only be paying for one bill every month.
Moreover, through paying off your debt using personal loans, the bill per month you would have to pay will not increase. The contrary is the case if you do not pay your debts, as the credit card companies charge a percentage from your credit card balance. This means that the amount you have to pay every month fluctuates as well.
Due to this reason, it also takes a much longer time to pay off credit card debt as the amount keeps increasing every month. Therefore, with a personal loan, you can get your debt paid off much sooner.
2. Consolidated Payments
By taking a personal loan to pay off multiple credit card debts at the same time, you would be consolidating all of your debts into one and ultimately, simplifying your life. As a result, your multiple monthly payments will turn into one. By streamlining your monthly payments this way, you will be able to manage your monthly budget and expenses much more efficiently.
3. Definitive Debt-Free Date
After obtaining a personal loan and paying your debt using that amount, you will also have a definitive date for when you will have entirely paid off all your debt. This is not the case with credit card companies, which allow customers to keep adding to their debt. Thus, the accurate time it takes to be debt-free becomes indefinite as well and keeps changing. This is fine for people who can pay in full every month, but it may lead to trouble for those who do not normally pay full every month. Moreover, it also does not apply to people who will not control their spending through credit cards either. For this reason, personal loans also give more motivation to stay focused and feel more relaxed.
4. Improve Credit Score
When you use personal loans to pay off your credit card debts, your credit score also improves much faster. This is only applicable if you pay your debts and do not fall back into the habit of excessive purchasing and increasing your debt.
The reason why credit scores improve is that personal loans are not taken into consideration as being part of a consumer’s credit utilization ratio. The lower ratio ultimately improves the credit scores.
5. Pay Off Other Debts
Since using personal loans to pay off your credit card debts lower your interest rate, they ultimately result in saving hundreds of dollars that would otherwise have been spent on the interest. Thus, you can use this amount to pay off your other debts, for example, mortgage debt, student loan debt, tax debt, etc.
Important Points to Consider
Personal loans come with a fixed interest rate, fixed monthly payment, and fixed repayment schedule that helps tell the exact date of when you will be completely debt-free. For these reasons and the ones mentioned above, people choose to opt for personal loans to trade off their credit card debts. However, while this is a great option, it may not be as great for everyone.
One of the pitfalls of personal loans is the freedom that they give you to use them for anything. Therefore, you need to be careful and ensure that the loan is used to consolidate your credit card debts and not be tempted to borrow things you will regret later. It is important to remember that personal loans are also another way of borrowing more money you will have to repay.
Moreover, be mindful that personal loans also come in your credit history and influence your credit scores. Thus, you should pay at least the minimum amount before the due date so that there is no significant impact on your credit scores and history.
The Bottom Line
A personal loan can be an excellent way of debt consolidation and not paying huge interest rates. However, you need to consider all the options available to you before applying for a personal loan.
More importantly, whichever method of debt repayment you use, you must remember that to get out of debt, you need to have control over your spending. Additionally, it is always a great idea to switch to cash from credit cards so that you do not fall into debt in the future again.