The risk of turning to personal loans for credit card debt relief

| Jul 22, 2020 | consumer bankruptcy | 0 comments

It is no secret that many credit card accounts carry high interest rates and dealing with rising balances on such accounts can be a stressful task. When similar challenges arise, many individuals in Kentucky may wonder if turning to a lower risk source such as a personal loan might be a viable option with which to seek relief. While this may help in some situations, it might not always be the correct path for debt relief and sometimes a long-term solution such as bankruptcy could prove more favorable.

Recent studies indicate that the average American household carries just over $6,000 in credit card debt. Studies suggest that those who take out a personal loan to pay down such debts may still face certain risks. One such risk involves the likelihood of continuing to use credit cards for everyday needs even after taking out a loan, as this may cause a person to fall into deeper financial concerns in the future.

Taking steps to fully understand the rates involved with personal loans could also be vital, as taking out a loan with similar interest rates as those on credit accounts might not be helpful. Those who struggle to make minimum monthly payments or to build a financial safety net may also find that a personal loan might not always be an answer to growing financial concerns. As a personal loan might come as one lump sum, there may also be some level of temptation to spend a portion of this amount instead of using it to reduce or eliminate other debts.

While dealing with debt can be stressful and intimidating, knowing how to choose the proper path for financial relief can also be challenging. Fortunately, there are attorneys who can examine the situation a person in Kentucky is facing and provide guidance on how best to approach the situation. Such advice could prove vital to helping a person better prepare to protect his or her financial future by seeking debt relief through the proper outlets.