STOP PAYING THE HIGH INTEREST RATES OF CARRYING A MONTHLY BALANCE ON YOUR CREDIT CARDS!
Shop around to up to 40 lenders at once without negatively affecting your credit score (SOFT CREDIT CHECK) by applying with one of our premium lenders on our marketplace page. Behind the scenes, we will check your rate with 40 other lenders. You will see all the approvals and you will be able to choose the loan that best meets your needs: https://theyukonproject.com/product-comparison/compare-personal-loans/
00:00 – Introduction
00:31 – Loan Pro: No origination fee
00:55 – Loan Pro: Competitive APRs
01:26 – Loan Pro: Direct Payoff
01:55 – Loan Con: No cosigners
02:19 – Loan Con: Can’t consolidate Discover Card debt
02:47 – What is Balance Transfer?
03:09 – Balance transfer introductory APR
03:44 – Balance transfer doesn’t solve the minimum payment problem
04:10 – Balance transfer: Read the fine print!
04:32 – The bottom line on Balance Transfer
04:59 – How to get the best deal on credit card debt consolidation
Discover offers competitive APRs on their Credit Card Debt Consolidation loans ranging from 7.99% to 24.99%.
The competitive APR is a two-edged sword. It means that they have fairly stringent lending standards. They say that their minimum FICO for approval is 660. So, Discover is really for people with pretty decent credit scores. If yours is lower, you could be approved, but it becomes increasingly unlikely.
Discover also offers the convenience of directly paying off your credit cards with the proceeds of the loan.
It streamlines the whole process. You don’t have to receive the funds and then pay off your other debts. This is convenient. But, there’s another reason it’s important. It shows that Discover understands that the loan will replace current debts instead of stack on top of them. This should make it easier to be approved compared with a lender who does not offer this service. And when you are borrowing from Discover for credit card consolidation, you are required to use at least two-thirds of your loan to pay off other debts.
On the downside, Discover doesn’t allow cosigners on their personal loans or credit card debt consolidation loans.
A cosigner is someone who agrees to take responsibility for your loan if you can’t make payments. If you can get the loan you need without a cosigner, it’s best not to include one. But if you might struggle to be approved or get the amount you need, a cosigner can help. Discover does not let you add a cosigner, though.
Another potential issue is that you can’t use a Discover personal loan to pay off a Discover credit card. That’s right. If you want to consolidate your Discover Card balances, you would have to use a different lender. Of course, you can get around this a little bit by asking to borrow extra money and using that extra money to pay down your Discover Card. Still, if you have significant debt on a Discover Card, this could be a deal breaker.
Now let’s talk about the other way you could consolidate your credit card debt with Discover: a balance transfer. This involves moving your balances from other credit cards onto a Discover card. You should not even consider doing this if the interest rate on the Discover Card is not 2-3 percentage points better than what you are paying on the existing debt.
Discover likes to entice you to do balance transfers by sometimes offering introductory 0% APR periods.
That can be really tempting. Paying zero interest for several months could be great, but only if you use the money you save to pay down the debt. If you are not using that introductory period to aggressively pay down the debt, the balance transfer might end up just be moving money around. Remember that part of the problem with credit card balances is that paying the minimum payment doesn’t get you out of debt very fast. Paying the minimum usually means taking 14-20 years to pay off the debt.
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