The average American is carrying around $6,354 in credit card debt, according to a recent study. Digging yourself out of a hole of debt isn’t easy, as many consumers are stuck making endless minimum payments and never seeing their balance move more than a few pennies at a time.

If you aren’t aware of the benefits of personal loans, this article will outline why you might want to consider applying for one if you’re struggling with credit card debt. Doing so can free you up financially and allow you to be in more control of your debt and overall financial situation.

How personal loans can help with credit card debt

For many, personal loans are the key to breaking free from the chains of credit card debt.

While personal loan interest rates vary, they are usually cheaper than credit card rates. This makes them an extremely attractive option for anyone looking to achieve the much sought-after title of being debt-free. Once you apply and are approved for a personal loan at a lower rate than your credit card debt, you use the personal loan to pay off this debt. You’re now able to pay less interest, save money, and get out of debt quicker.

Choosing the personal loan that’s right for you can be difficult, as the internet is full of scams and so-called “deals” which can actually worsen your financial situation. Still, there are plenty of reputable companies that can help you regain control of your finances.

2 top choices for personal loans are:

• Credible: This online loan marketplace will show you prequalified rated from up to 11 lenders at once (a huge time saver). It takes just 2 minutes to get your rate. Credible can find you a personal loan for amounts between $1,000 and $100,000. Credible has a Best Rate Guarantee which will give you $200 if you find a better rate elsewhere (terms apply, see Credible.com for details).
• Upstart: This personal loan company believes you’re more than your credit score. It takes your job history and education into consideration when determining your rate. You can get a personal loan from Upstart in amounts from $1,000 to $50,000.

What is a personal loan?

A personal loan allows you to borrow a fixed sum of money for various reasons. You pay off the money by making fixed monthly payments each month. There is a set end date, which makes budgeting extremely simple. Payment terms can vary by lender.

Most personal loans are unsecured, which means you don’t have to provide collateral to be approved. This is different from other loans such as mortgages (where your collateral is your house) or auto loans (where your collateral is your car). And unlike other loans, there are virtually no restrictions on how you spend the money you receive. Of course, a personal loan should only be used when there is a genuine need – and paying off high-interest credit cards is certainly a need for anyone looking to improve their financial situation.

Consolidating credit card debt with a personal loan

Trying to pay off even one high-interest credit card can be difficult, and that struggle is intensified with every additional card that you carry a balance on. Not to mention the hassle of making sure all of the payments get sent off every month, when they probably all have different due dates. And everyone knows that even one payment slip-up can be a black mark on your credit report.

Once you’ve been approved for a personal loan and received the money, you can take that cash and pay off every single card you own. You can close your accounts, shred the cards, and never look back. Yes, you’ll still owe the same amount of money as you did before, but you’ll be paying it off in one payment each month and saving a ton of cash in the long-run by no longer paying the incredibly high-interest rates charged by credit card companies.

How to get a personal loan

Technology has come through in a big way when it comes to personal loans, allowing you to apply online and receive your rate in just minutes. If you accept the terms, you’ll receive the cash into your bank account as soon as the next business day. No meetings, no appointments with loan officers, and no need to leave your home at all. It couldn’t be easier.

2 Top personal loan choices are:

Credible:

This online marketplace is a huge time saver. Credible will give you prequalified rates from up to 11 lenders in just 2 minutes. Credible can help you get a personal loan in amounts from $1,000 to $100,000 and has a Best Rate Guarantee. If you find a better rate elsewhere, Credible will give you $200 (see terms at Credible.com)

Let Credible.com find you a personal loan.

Upstart

Founded by former Google employees, Upstart offers loans ranging from $1,000 to $50,000. This personal loan company believes you’re more than your credit score. It takes your job history and education into consideration when determining your rate.

Borrowers typically will need a minimum credit score of 620, although applicants who have an insufficient credit history and therefore do not have a credit score can also be accepted.

Loans not available in: WV, IA

Apply for a personal loan from Upstart.