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No Credit Check Loans – Need to Pay off Credit Card Bills?

Posted on | November 2, 2009 | No Comments

Getting a no credit check loan could help you get the extra money you need to pay off your credit card bills.  Many financial analysts and planners would advice you to never pay off debt with debt but there are some circumstances where it may benefit you.  If you can get a lower interest rate on a loan than your credit card payments there is no reason that you should not use that money to pay off the credit cards.

Before going forward at all, if you are not a great with numbers you should not even try this.  It is likely that many bad credit borrowers are not good with number but there are definitely some of you out there that can sit and grind numbers out to make money work in your favor.  The best way to do this is to actually use Excel or a spreadsheet or even write it down on a sheet of paper.

When you set up what you want to do you need to figure out how much interest you are paying on your credit card.  Simply multiple the interest rate times your balance.  For example, if you have a 24% interest rate and you have a balance of $5000 it would be 5000 times .24.  Remember that this will give you the interest rate over the entire year, not just one month.

Also please realize that this is the interest rate if your balance is fixed at $5000.  It is likely this balance is going to fluctuate so this is just an estimate but it will work for this exercise.  So if you have a 24% interest rate on a $5000 credit card balance you are going to pay about $1200 in interest over the year; that is $100 a month just in interest!  If you can get a $5000 no credit check loan at a lower interest rate you can save money.

If you qualify for a no credit check loan at an interest rate of 18% then you will only pay $900 over the course of the year.  You could save $300 this year by qualify for this loan and using it to pay off your credit card.  The question that you have to ask yourself is “what amount of savings is worth my time?”  If you are only going to save about $50 over the year it might not be worth it to get a loan but if you are going to save several hundred it is likely to be worth it.

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Author: Jeremy North

Category: No Credit Check Loans

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