Actually, you’re in good company.
The average American household has , $15,000 in credit card debt, but you sure wouldn’t know it. People may talk all day long about their Paleo diet, their love life, even their student loans, but bring up the subject of money, especially (cue horror-movie soundtrack) credit card debt, and suddenly everyone clams up.
One in five people consider money a taboo subject, according to a recent Harris poll. It’s also the No. 1 cause of stress, according to the survey, ahead of work, family and health concerns. So unless you’re expecting a windfall from a long-lost relative (not that you’d know, odds are that relative didn’t talk about money either), it’s up to you to come up with a game plan to manage your finances.
The obvious solution is to hurry up and pay off the debt, but in the meantime, there’s another way to save money, an especially helpful one if you are in the “post-grad plateau,” at the early stage of your career with higher income potential just around the corner.
With the average annual percentage rate for fixed-rate credit cards at 13.02% and variable-rate credit cards at 15.82%, you can easily save thousands of dollars by refinancing credit card debt with a personal loan.
Need the hard numbers? Here’s an example:
Let’s say you have $15,000 on a fixed rate credit card with a 15% APR, and your goal is to pay it off within three years. Your monthly payment would be about $520, while your total interest cost would be about $3,700 – and that’s if you don’t continue to charge new debt on the card.
Now let’s say you qualify for a 7.5% APR personal loan with a 3-year term, and use it to refinance your credit card debt – your monthly payment would go down by $53 and you’d save almost $2,000 on total interest over the life of the loan.[i]
THE COST OF PAYING OFF $15,000 OVER THREE YEARS
Of course, everyone’s situation varies, but you can use a loan payment calculator to do the math on your own loans.
Need another reason to refinance credit card debt? How about five?
Here’s how a SoFi personal loan can help you slash your credit card debt and bolster your bottom line:
1. Borrow from $5k-$100k at fixed rates that start at 5.95% APR (with AutoPay) and variable rates that start at 4.73% (with AutoPay).[ii]
2. No origination fees or prepayment penalties.
3. Easy online application and access to live customer support seven days a week.
4. If you lose your job, SoFi will temporarily pause your payments and help you find a new job. (Note that interest accrues during the forbearance period and is added to principal when you resume repayment.)
5. End the vicious cycle of credit card debt, rather than transferring the balance to yet another credit card that you can continue to charge up.
So with new information, education and a game plan, the next time the subject of money—credit cards, perhaps?–comes up, odds are you’ll have plenty to talk about.
[i] Click here to see personal loan examples that depict APR, monthly payment and total finance charges.
[ii] SoFi rate ranges are current as of May 1, 2015 and are subject to change without notice. Learn more about SoFi personal loan rates and eligibility here.
