Suggestion Needed

[Anonymous]

All these days i am silent member of the community and the community posts always helped me. However with some unexpected debt that came up, i am in a fix and would require a suggestion from the community.

I currently have a balance of 23K on my Amex card which is under 0APR until next month and start charging an interest rate of 20.9% APR from July end. I was offered a personal loan at 15%. now should i take the personal loan and claer the Amex card ? or should i continue paying up the Balance. I can pay nearly around 1500$ a month.

[medicgrrl]

Just my personal opinion, I would take the loan and pay the $1500 towards it. Then I would take the credit card out of my wallet, if you haven't already.

[RobertEG]

A new loan may involve a hard pull.

If approved and reported, it will have an initial age of zero, lowering your overall AAoA.

It will also add an installment account with 100% of original loan as unpaid balance.

Thus, it will have some initial scoring impact.

Balanced against the impact of a new loan is the reduction in % util of revolving that will occur by shilfting the debt deck chair from revolving to installment.

Also, you will save overall interest.

It is a balancing decision with no clear yes or no.

In general, I would likely take the plunge based on the likely scoring improvement that will be obtaind from reduction of % util on the revolving account.

% util of revolving is normally a more significant scoring factor than AAoA or a short-live hard pull.

[rmduhon]

Only do this if you can keep yourself from using the Amex again until the loan is paid way down or off, excepting the possibility of using it for bills you'd already be paying and paying that off every month. Otherwise you'll be in worse shape than having to pay 20.9% interest. Can you honestly do this? This isn't a judgement against you. Some people can't do this and only you know yourself.