No one should pay more interest for their debt than they absolutely have to.
If you can’t pay off debt using your existing assets, the next best option is to exchange it for lower interest rates until you can pay it off.
Shifting your debt from a higher-interest account to lower-interest account is called “optimizing” your debt. Optimizing certainly doesn’t make debt disappear, but it can save you a bundle in interest!
Here are 4 low-interest options that can help you get out of debt much faster:
Option #1: Prosper
Prosper is an online lending platform where borrowers get unsecured personal loans through a network of lenders.
Prosper launched in 2006 as the first peer-to-peer lender in the U.S. and has originated over $250,000,000 in loans.
You can use a low-rate Prosper loan for debt consolidation, home improvement, autos, small business investment, wedding expenses, or anything you like.
Right now loans are as low as 5.99% and investors can earn a seasoned average of 8.89% APR. Learn more about how to invest through Prosper.
Option #2: Lending Club
Lending Club is an online lending platform that brings borrowers and investors together. They have generated over $400 million in loans since founding in 2007.
Borrowers can get rates as low as 5.99% APR unsecured personal loans of up to $35,000. Use a Lending Club loan for just about anything you need, such as buying a home or car, planning a wedding, taking a vacation, or relocating for a new job.
Option #3: Balance Transfer Credit Cards
Using a balance transfer can be a smart way to manage your debt–if you use it wisely. They allow you to save money and pay off debt at a much lower interest rate each month.
Balance transfer cards offer a promotional period (such as 6, 12 or 18 months) when you’re charged little or no interest. You simply use an online form or a convenience check provided by the new card company to transfer the debt and save money right away.
Balance transfer offers are always changing so do your homework to find the best one for your situation.
Option #4: Simmons First Visa
The Simmons First credit card offers one of the lowest rates in the industry with no annual fee, global acceptance, free Travel Accident Insurance, Auto Rental Insurance worldwide, and more.
Finding a loan or credit card with the lowest interest rate (and combination of benefits that makes sense for your situation) will help you save money and improve your entire financial life.
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Hello Laura, My name Michelle
I have a credit card my interest rate is 25.24% I had the card for a year and six months, credit limit at that time was 2,000 dollars first charge on the card was 1,700 dollars, I paid it off in 6 1/2 months because I paid it off quickly, the credit company gave me and increase credit limit up to 2,800 dollars 3 months later I used my card again this time 2,340 dollars four months later I paid my card balance down to 1,200 dollars.
Ms. Laura my question to you when I pay off my balance again in a short period of time, should I then make my move and call the credit card company and request to lower my interest rate?
Hi, Michelle – It’s always worth requesting a lower interest rate on a high-rate credit card, however, many card companies will resist. Another option is to find a different, lower-rate card offer and apply for it. You can keep your high-rate card just for emergencies or use it once in a while to make a small charge that you pay off in full. That’s a good way to make sure the card doesn’t get cancelled for inactivity and use the card without having to pay a high interest rate. I hope this helps!
My preferred option is to get rid of debt completely instead of borrowing. Low-interest rate and zero balance offers are hooks for those who are poor money managers.
Yes, having no consumer debt is the best option. But when you already have it, optimizing it so you pay as little interest as possible, is the best move.
This is the best podcast about money management out there. Topics are well explained in the simplest terms with nice well written articles to reinforce the various topics. Thanks so much.