It might or might not be a good idea to pay off your credit cards by using money from a personal loan, but we're going to take a look at the pros and cons, and when you've read them, you should be able to easily decide whether or not it makes sense for you. Moreover, it needs to be said right up front that the intent of this article is not to suggest that you take out a personal loan in order to pay off your credit cards, but is merely to point out the pros and cons of doing so.

First off, it's probably not worth taking out a personal loan to pay off your credit cards, if you owe less than $15,000 on them.

If you do owe more than $15,000 though, and you're likely to start missing payments, then paying off all your cards might be a good idea, because you'd avoid future penalties, and paying more interest on the interest.

The first thing that you need to do, is to check how much interest you're paying on your cards, because you'll later need to compare this sum with the interest that's being requested by the bank offering the personal loan. The amount of interest that's charged for personal loans varies greatly, will depend mostly on your present FICO score.

If your credit rating's not in great shape, then it's likely that the interest on a personal loan will be higher than it is on your credit cards, but if you get behind on your credit card payments then the penalties build up fast, and so does the compounded interest.

The interest on personal loans does not compound, and you can make arrangements for different repayment schedules when you sign up. What's more, you'll only be making one payment a month, and a paid off personal loan looks a helluva lot better on your credit rating, than skipped credit card payments.

Should you think that a personal loan might be the best option, then before you go hunting for one, the following are what you'll most likely be asked for, if and when you apply for one.

1) A minimum of 3 months proof of employment.
2) A recent pay slip, that shows your take home pay.
3) Utility receipts, which will be used to confirm your home address.
4) Checking or deposit account details.

If you get loan approval, which should be within 24-48 hours, then the money will be almost immediately deposited into your bank account, and your monthly repayment will also be deducted from the same account automatically.

You should check out at least three loan companies before finally deciding on one, and then compare the following.

1) Interest rates. 2) The type of repayment schemes available. 3) Semi-hidden fees, and be alert to these. 4) The things that you'll most likely be asked for are. 5) How long it will take to get approved.

The final and most important thing to check before signing on a dotted line, is whether your monthly payments will be higher, or lower with a personal loan.

Once you know that, you should easily be able to make an informed decision as to what would be best for you.

Some Parting Words Of Advice.

Don't be glib about personal loans, and only request one because you really believe that it will benefit you. You want it to improve your situation and not worsen it.

After you get your loan, please do your best to ensure that your monthly payments get paid on time, even if this means that you'll have to cut back on a few perceived luxuries. Remember that missed payments on your personal loan, will very negatively affect your future FICO score.