How to Use Personal Loans to Pay off Massive Credit Card Debt

If you have massive credit card debt, you should know that you're not alone. Millions of individuals around the world are suffering with overwhelming credit card debt that is threatening to pull them under. If you're looking for a solution, here is some information on how to use personal loans to pay off massive credit card debt.

Instructions

1

Gather All Credit Card Bills. The first thing you need to do is gather all of your credit card bills so you can determine exactly how much money you will need to pay off your credit card debt. Make a list of each credit card, the balance owed on the card and how much the interest is. Once you have gathered every single bill, add up the balances so you will know exactly how much credit card debt you have.

2

Speak with Your Bank or Credit Union about a Personal Loan. Depending upon your credit history, loan history or debt to income ratio - you may need collateral for a loan. Speaking with a representative of your local bank or credit union will help you determine whether this is needed or not. Explain to them how much you need and what you can offer as collateral if needed. When you are told how much you are approved for, you can further determine how to use the money to pay off your credit card debt.

3

Create Priorities. You may or may not be able to receive a loan that is high enough to cover all of your credit card debt. If not, you will need to create priorities. Look again at your list of debts and pay special attention to the cards with high interest rates. They should be paid off first. Pay off the credit cards that you can - paying the highest interest cards first. This will help you save money in the long run. You will have only one payment (the loan) rather than several and most likely it will be a fixed rate rather than a variable one.

4

Pay Off Your Credit Cards. Now that you've determined which credit cards to pay off, or if you will be paying them all off, you need to do a few extra things. Send the money in a money order or check so you will have proof of the transaction. If possible, send the money certified mail so you will receive a receipt when the mail has been signed for and delivered. Also, send proof of the payoffs to all three major credit bureaus. These are TransUnion, Equifax and Experian. This will help insure that the information makes it onto your credit report and that the credit bureaus are aware that you've paid the debts off.

5

Cut Your Credit Cards in Half. Okay, so this is an optional step, but it's important to learn how to manage credit cards. It's all to easy to end up overwhelmed by credit card debt again and be back in the same situation you were in to begin with. Consider credit counseling or something similar to empower you and give you knowledge about credit concerns.