Could personal loans work for you? Do your research.

Updated: Oct. 21, 2020 at 11:42 AM EDT
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RICHMOND, Va. (WWBT) - Personal loans are spiking in popularity right now, and not just for projects around the house. A lot of people are using them to pay off debt.

So many different companies are now offering personal loans out there. Loans are a good way to consolidate all your debt into one payment, but Cherry Dale a financial coach with the Virginia Credit Union says you just need to be careful.

“The thing that we have seen is that people will consolidate that debt and go right back and use those credit cards which gets them into even deeper debt situation,” said Dale.

Which is why Dale says not to use other credit cards if you consolidate debt. Cut them up and work on making that payment.

If you do need a loan look at the APR they are offering you. Try to get a good one, but remember, this is an unsecured loan so interest rates are going to tend to run higher.

If you have a credit card with a 19% interest rate, moving that money to a loan with a 28% interest rate isn’t going to make much sense.

And, watch out for the fees you are charged for these loans. Ask a lot of questions and read the fine print.

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