Is Taking a Personal Loan to Pay Off Credit Card Debt a Good Idea?
It is easy for credit card expenditure to get out of hand as you do not see hard cash going out of your wallet. So, you can lose track of how much you spend. But what happens when you overspend and start missing payments? Late fees, high interest rates, and taxes add a hefty sum to your monthly bill. You can pay the minimum amount due if you are broke, but the balance will attract high interest rates.
So, how do you pay off mounting credit card dues? Just take a Personal Loan to pay off credit card debt.
Financing options to pay off credit card debt
- You can ask your bank to convert your credit card debt into EMIs. But you will still pay interest rates of 18% to 24%.
- You can transfer the credit card dues to a new credit card with a lower interest rate. This is not a good option if you have huge credit card debt. Even lower credit card interest rates are quite high, compared to other financing options, such as a Personal Loan.
- Pay off credit card debt with a loan. With low interest rates and flexible EMI options, taking a Personal Loan to pay off credit card dues has several benefits.
Personal Loan: The best loan to pay off credit cards
A Personal Loan is your best loan option because the lender does not ask for security or collateral. This makes getting a loan to pay off credit cards easier.
Besides, you can apply online for Personal Loans. Lenders like Bajaj Finserv claim to approve your online application within five minutes. Personal Loan amounts can be as high as Rs 25 lakh. This can be a big help even with high outstanding debt.
Personal Loan to pay off credit card debt: Good idea, or not?
Getting a loan to pay off credit cards is a good idea. Take a quick look at the advantages of this financing option:
- The interest charged on Personal Loans is lower than interest on credit cards. The rate on a Personal Loan can be as low as 11.49%. But credit card interest rates range from 30% to 40%.
- o you have multiple credit cards? It can be tough to keep track of repayment schedules. So, use your Personal Loan for debt consolidation. Pay off multiple cards. Then you only have to concentrate on repaying your loan one EMI at a time.
- With Personal Loans, you can fix your tenure and EMI based on your repayment capability. Personal Loans have tenures of one to five years. With a longer tenure, you pay a lower EMI. Besides, some lenders such as Bajaj Finserv have flexible policies for loan pre-payment. Suppose you get a bonus, you can use that to pay off the loan before the end of the tenure.
So, there’s no need to worry about rising credit card dues. Manage your finances comfortably by taking a Personal Loan to pay off your credit card debt.