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Every credit card billing statement displays a monthly minimum payment due. For instance, a $3,000 balance on a 10% APR card with a minimum monthly payment of 2% has an initial minimum payment due of only $60. Over time, your balance will get lower, so your minimum payment due figure also drops. While payments gradually get smaller, it will take you approximately 159 months or over 13 years to pay off that debt! Under this scenario, you'll end up paying over $1,700 in interest payments alone!
By the same token, if you were to take out the same $3,000 using a standard 36-month signature loan at 10% APR, your monthly payments would be approximately $97. While your monthly payments are slightly higher, you'll pay less interest and pay off the entire loan 10 years faster!
Getting a signature loan is an easy way to systematically pay down your debt. If you're simply paying the minimum balance due on your credit card bills, consider setting up a signature loan to help erase your debt quicker.
Want to know how much you can save? Our credit card minimum payment calculator and our signature loan calculator can help!
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