With personal loans, you receive the money in one lump sum and make steady fixed payments over a certain amount of time, usually a couple of years. For this reason, personal loans are best for larger purchases that will take some time to pay off.

Credit cards offer a revolving line of credit that you can use and reuse. Since interest rates are usually higher on credit cards, they are best for smaller purchases that you can pay off quickly. Credit cards can also be a smart choice when consolidating debt. For example, UWCU cards offer 0% balance transfers.

Both a personal loan and line of credit can provide you equal parts financial support and flexibility. What makes one better than the other depends on what you intend to use the funds for. If you’re thinking of making a larger lump-sum purchase, then a personal loan is probably the way to go. If you’re in need of additional cushion for monthly expenses over an extended period of time, a personal line of credit is probably your best bet. To get a better idea of the advantages of each, check out our comparison chart.

Yes, loans are available even if you don’t have perfect credit, although you may not qualify for the lowest rate available. Learn more about your credit score, or request a free credit consultation so you can better understand your financial picture and look for opportunities to save.

Some lenders charge origination fees; UW Credit Union does not charge these fees for any personal loan or line of credit.

Sometimes referred to as discount fees or points, an origination fee is an upfront charge for putting a loan in place. It’s the lender’s way of covering the costs of funding, processing, and handling the loan. In some cases, the origination fee can also include the costs of underwriting the loan. These fees are usually quoted as a percent of the total loan, and can range anywhere from 0.5% and 1.5%.

Debt consolidation involves taking out a new loan or line of credit in order to pay off other existing loans, essentially combining all your current debts into one convenient payment. If you have loans or credit cards that are accruing interest at a high rate, debt consolidating can be an extremely smart financial move. Personal loans, low-interest credit cards, and even mortgage refinances are all effective methods of consolidating debt, especially if their rates are lower than what you’re currently paying. To see if debt consolidation can save you money, use this calculator.

Consolidating debt can help you:

• Organize your finances. By rolling all your balances into one low monthly payment, you can better manage your debt.
• Save on interest. With a lower interest rate, you could save hundreds, even thousands, of dollars in interest.
• Get a better term. Choose a term that fits for your goals. Pay off your debt quicker with a shorter term or reduce your monthly payments with a longer term.