You put up the details of your debt, why you’re wanting to use the funds, and the P2P site dictates your credit worthiness.
Groups of people all chip in small amounts of money in your loan in hopes that as you pay it off they will get their principal back plus some interest for their risk.
You will almost always pay a balance transfer fee of 3% for your new credit card company to transfer the funds, but you will usually get 0% interest for 12 to 18 months after that as a reward.
: The Best Zero Percent Balance Transfer Credit Cards.A personal loan is where a financial institute extends a loan to you directly in order to pay off some of your debts.Here are some debt consolidation options to consider: If you are dealing with a lot of credit card debt one of the easiest ways to temporarily drop your interest rate is through a balance transfer.With a balance transfer you open a new credit line with a new company, and they pay off the balance on your old card and put it on the new account.They temporarily save interest, but they don’t change the habits that got them into debt in the first place. You max out a credit line on one side to pay off all your other debts, but then find yourself with a new stack of other debts that you now cannot pay.
As risky as debt consolidation can be, it does pay off if you can be disciplined and work your debt payoff plan.
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Debt consolidation is primarily designed for unsecured debt (i.e. When you consolidate your debt, you take out a loan to pay off several other debts.
Then you’ll be up to your eyeballs in debt and have no where to live.
Losing your home is a great risk to this type of debt consolidation.
This means you can get rock-bottom interest rates (refinancing rates are around 3-4% depending on if you take a 15 or 30 year term) and save a ton of money in interest.