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Pros & Cons of Using Happy Money for Credit Card Debt Consolidation Personal Loan

Welcome back to The Yukon Project. We’ve analyzed millions of credit reports, hundreds of thousands of people’s financial information, and designed programs to help improve people’s financial lives. Today, we’re going to look closely at the pros and cons of consolidating credit card debt with Happy Money. Happy Money is a respected personal loan provider, but would one of their loans be good for someone who is consolidating credit card debt?

Happy Money’s network of lenders is a pro for Credit Card Debt Consolidation Personal Loans.

You see, Happy Money is not actually the lender. They have a network of lenders, both banks and credit unions that do the actual lending. This might actually increase the chances that a lender would approve you if you apply through Happy Money. 

That leads to Happy Money’s next pro and that is their APR. They offer loans between 11.72% and 17.99%. If you’re borrowing more than $15,000, the lowest rate you can qualify for is 12.45%. Now, 17.99% would be a great rate and is lower than most credit cards right now. You should only consolidate your credit card debt if you can get an APR that is 2-3 percentage points lower than the interest rate you are currently paying on your credit cards. 

Happy Money’s minimum FICO is 640.

Lenders that offer interest rates below 20% usually means that they are quite exclusive about who they will approve. The fact that Happy Money will lend to people with credit scores as low as 640 is actually really good.

The fact that Happy Money does not charge a late fee is another pro. If you are regularly a bit tardy on some of your payments, late fees can really add to the cost of borrowing. The fact that Happy Money will never charge you a late fee can help you feel more confident about the total cost of borrowing. 

Happy Money lends as much at $40,000 for Credit Card Debt Consolidation Personal Loans.

That’s usually enough to consolidate all the credit card debt that you might have. If you have more credit card debt than that, I would recommend talking with a certified debt counselor at a non-profit organization before consolidating. They can help you work through the options that might be best for you.

Happy Money 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 Happy Money 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. 

There are a couple of downsides to using Happy Money to consolidate credit card debt. 

The first one is the fact that Happy Money charges an origination fee between 1.5% and 5.5% on their loans. It’s important to understand that the origination fee comes out of the loan proceeds. So if you borrow $10,000 with a 5% origination fee, you’ll only receive $9,500 but you’ll have to pay back the full $10,000. Even though the origination fee is included in the APR, you don’t get a prorated reimbursement of the origination fee if you pay the loan off early.

The higher minimum loan amount is another con. Happy Money won’t lend less than $5,000. If you only have moderate amounts of credit card debt, Happy Money may not give you a loan low enough. Taking a bigger loan could undermine the whole point of consolidating your debt in the first place. You could get around this a bit if you take a bigger loan amount and use the extra money to make an immediate principal-only payment. 

The fact that Happy Money will not accept cosigners on their loans is another con. A cosigner is someone who can be held responsible for repaying the loan. Cosigners can often help you get approved, or be offered a larger loan amount or a lower APR than you could on your own. If you have a spouse or significant other, it might feel natural to include that person as a cosigner, especially if you comingle your finances. Might as well get the benefits of working together. But, Happy Money doesn’t have this option.

Happy Money may be a great option for you, but you owe it to yourself to shop around and make sure you are getting the best deal that you can get. At The Yukon Project, we’ve tried to make shopping around easy. You can visit our marketplace page and apply to one of our premium lenders. Behind the scenes we will check your rate with up to 40 lenders. The application will not affect your credit and we will show you all of the approvals so you can select the loan that is right for you. 

I have a final thought about consolidating your credit card debt. Some people see credit card consolidation loans as a great way to simplify your monthly payment. After all, you bring several bills into a single payment. While consolidation will definitely do that, it is important to remember that this is not a good reason to consolidate in and of itself. The point of consolidation is not to simplify your life. The real point of consolidation is the pay off your debt. And THAT will simplify your life. So, don’t just consolidate so you have fewer bills to pay. Consolidate when it will help you pay less interest, make bigger principal payments, and pay off your loan sooner. 

Happy Money could be a great option for consolidating your credit card debt into a single personal loan, as long as you are aware of the downsides going into it.

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Jonathan Walker