PL to Pay Down CC debt

[Anonymous]

Howdy - 

This group is always so helpful so I thought I'd throw this out and see what advice comes back. 

I have credit card debt that I would like to consolidate. My credit isn't great at the moment (mid 600's) as my DTI ratio is a little high. I have on-time payments, no derogs. 

I'm considering a small PL (about 5k) to pay down my debt. So far, I've looked at SoFi and Prosper. I tried PenFed but wasn't approved through their prequal (they listed too many recent inquiries and high balances). I'm not super concerned about a higher APR, as I have a side business that would allow me to pay the loan off faster than the term I would take it out for. Does anybody have thoughts or other suggestions? 

[CreditInspired]

Hi

It would help if you provided stats. We need something to work with 😁

[Anonymous]

Whoops! 

I currently have: 

2,000 - Discover

1,500 - AMEX

1,600 - Cap One

900 - AppleCard

400 - Nordstrom/TD Bank

It looks like my FICO8 is 640 and I'm using 48% of my available credit. 

[SlideOrInsert]

taking out another loan for the sake of taking out a loan doesn't make sense if you are going to pay it early. might as well just make the payments to the credit cards.

where a new loan makes sense is if the apr is less than the blended apr of your credit cards. to find yours for example:

	apr		balance
Discover	18	x	2000	=	36000
AMEX	16	x	1500	=	24000
Cap One	20	x	1600	=	32000
AppleCard	20	x	900	=	18000
Nordstrom/TD Bank	24	x	400	=	9600
sum			6400		119600

blended apr 18.69% = 119600/6400

I had a good experience with prosper. although sofi/prosper give you your rate with a soft pull, be mindful of origination fees.

[expatCanuck]

Do it only if you can save money, won't take an undue hit to your creditworthiness, and are insanely confident that you've acquired the discipline to not accrue additional credit card debt before the loan is FULLY paid off.

(I'd offer that there's an AA analogy to be made here.  I'm a reformed credit abuser, and have to maintain constant vigil to refrain from my prior profligate ways.  I haven't succeeded -- only succeeded thus far (my FICO scores were in the mid-600's 5 years ago).

[Anonymalous]

Have you considered a local credit union? You could walk in and talk about the options. At the very least, you could get some idea of your chances. And since a big part of the mission of CUs is financial education, they might have good advice.