Taking out a personal loan to pay off CC

Anonymous · ‎08-16-2016

Hi,

So my SO has one CC with a balance of $6700 out of $7,000CL on the card.

This is pretty much the only card she has a balance on she was able to transfer all her balances from her other cards to this one because there was no balance transfer fee and it had a 0 apr promo for the first year.

The only thing is she needs at least a year to pay it off but in the meantime due to the high balance it will drag her credit down we think. Her total CL is $24k and total balances are about $7.5k with that one card holding a high balance.

What do you think is the best option pay off the balance over the year leaving it on the card or taking a personal loan and paying it? (Her CS is about 675 was 690 but had a few inquiries and high balance recently).

Thanks!

mystikal1 · ‎08-16-2016

I would say at 0% keep it. Pay it down and if you lose any points they will come back as it is paid.

Aduke1122 · ‎08-16-2016

It's always an option IF she is not going to run the balance up again , then you will be paying off a loan and the cc at the same time .

Anonymous · ‎08-16-2016

The most she would be adding without paying in full (new stuff) over the next year would be about $500 so not really running it up.

The 0% expires in April 2017. But in the meantime isn't that one reporting as really high utilization which drops her CS? Overall utilization is about 30-35% but utilization of that card is 95%.

So is the best option to just make payments on the card (about $125 a month right now but more in 3 months when she starts working about $400 a month) or do a loan so it does not hurt credit?

Anonymous · ‎08-16-2016

@Anonymous wrote:
The most she would be adding without paying in full (new stuff) over the next year would be about $500 so not really running it up.

The 0% expires in April 2017. But in the meantime isn't that one reporting as really high utilization which drops her CS? Overall utilization is about 30-35% but utilization of that card is 95%.

So is the best option to just make payments on the card (about $125 a month right now but more in 3 months when she starts working about $400 a month) or do a loan so it does not hurt credit?

Reading the post, the "intention" was to pay OFF the 0% bt in one year with cash.

It would be great Self-Discipline to adhere to that.

If not, just pay the piper and pay the interest on the CC balance. And call it a Success!

Anonymous · ‎08-16-2016

Hi Sebastian -

We don't mind paying the interest rate once the 0% runs out. The only thing we mind is CS dropping due to a high balance on one card in her portfolio.

Which is why we're asking what the impact of leaving the balance on the card would be (if any) making payments on it regularly and if a debt consolidation loan would be more beneficial.

mystikal1 · ‎08-16-2016

If you are not going to app for anything significant (mortgage, car) until it's paid off shouldn't amount to much. I just did an app spree and about 20k in BT's I haven't seen a drop in scores, even with the HP's. You have 0% until 4/17 see how much you can pay down. At that time maybe look at another card for a BT. Just my .02.

Anonymous · ‎08-16-2016

Why not make use of those BT's you made? With 0% for 12 months, you can make a good dent in that. I think a consolidation loan/personal loan will look bad with creditors unless you don't need it. Just my 2 cents.

Anonymous · ‎08-16-2016

Mystikal1 -

In the last 2 months (since the balance went above $6,000/$7,000) we've seen about a 30 point drop.

This as well as 1 app which was approved recently are the only derogatory things. I mean a 30 point dip is pretty significant I that short of a period. Which is why we're even considering a Debt Consolidation Loan. What are your thoughts?

Anonymous · ‎08-16-2016

If you have alot of credit, it shouldn't make a difference. But when those new cc's hit, it will lower your AAOA and that will make a bit of a difference. But your scores will bounce back quickly.

@mystikal1 wrote:
If you are not going to app for anything significant (mortgage, car) until it's paid off shouldn't amount to much. I just did an app spree and about 20k in BT's I haven't seen a drop in scores, even with the HP's. You have 0% until 4/17 see how much you can pay down. At that time maybe look at another card for a BT. Just my .02.