Paying C.C. with Personal Loan?

[Jansroom726]

Hi All.

I'd appreciate your input.

I have about 9k in Credit Card debt - spread across multiple cards.

Most all of it are on 0% interest cards, however they are running out soon.

SO - I was approved for a personal loan through Prosper at a decent rate of 9.5% for 36 months.

What I would like to do is pay off all my debt - however I have a few questions:

If I pay off all my debt, do you think any of my creditors would close the cards?

For example: I have 2 citi cards with 6K limits each, and each has a current balance of 2,500. If I pay them both off, would they close/slash my limit?

Would it be better to pay them off about 80-90% so it doesn't look like I'll never use them again?

I'm just trying to figure out how to best use this personal loan to consolidate my debt, without spooking any of my current creditors.

Thanks

*EDIT: When I say pay off my debt, I mean to my Credit Cards. I will obviously have a personal loan payment - which is 100% manageable, and I anticipate paying it back in half the time. Due to an unfortunate roomate situation, I had racked up the debt. 

[Anonymous]

Are you planning on still using the cards after you pay them off? If so, go ahead and pay in full. Credit card companies typically like to see big lump sum payments.

[Jansroom726]

I do plan on using certain cards (maybe not all), and PIF each month.

(As I don't use my debit card, everything will go on CC's and be paid off monthly)

[krielly]

I took out a personal loan at about the same interest rate approx 2 years ago for 16k to pay off cc balances. I did not experience any cl reductions or account closings as a result. In fact I got a huge bump in credit scores due to the utilization drop. I currently rotate use of my cards to keep them active, typically letting only one  report a balance and pif each month. I've also received a few nice cli's since.

[Jansroom726]

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@krielly wrote:

I took out a personal loan at about the same interest rate for 16k approx 2 years ago for 16k to pay off cc balances. I did not experience any cl reductions or account closings as a result.

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Great - thank you! I took out 12k to allow for a small cushion.

I'm hoping there isn't any AA involved - as I'm making sure they are paid, and then I can focus my attention to 1 single set payment.

[Anonymous]

Pay them in full. Shouldnt be an issue

[TheConductor]

Agreeing with all of the above.  I've also experienced no AA from paying off large balances in full.

I'd also recommend that you look at your Prosper account about a year from now to see if they are offering a better APR.

I was able to essentially refinance the remaining balance of my first Prosper loan at a much better interest rate. My FICO had not improved very much after 1 year, but my internal rating at Prosper went from C to AA after 12 months of perfect payments.

I know you are planning to pay the whole thing off in 18 months, so you'd need to do the math to see if you're really saving that much on the last 6 months after paying the origination fees, but it's worth a look.