Paying your Credit Card dues punctually is the best financial exercise. But, missing even a single payment could set you in hot water. Once you are in debt, you’ll see that it increases quicker than rabbits. If you see yourself fighting with debt on more than one Credit Card, and you’re thinking about taking out a Personal Loan to clear your dues, you’ve come to the correct place. We’ll assist you to discover a way to deal with your situation.
With credit cards in our wallets, we have the alternatives of investing even if we don’t have any funds at the thrown away. However, we wrongly think about those credit cards to be an addition of our income and thus, end up investing more than what we can settle up with. Worse still, the outstanding balance carry on increasing at a swift pace because of high rate of interest imposed by the credit cards, this can be as high as 45%. This is when Loan Connect investigates alternatives to come out of the booming debt trap. Personal loan is often poured as one of the most useful options to pay off credit card dues.
Low interest rates: The rate of interest on personal loans is notably lower than the interest rate charged by credit cards. While interest rate on credit card normal can be as high as 45%, lenders charge 11.5-24% interest rate for personal loans.
Simpler to handle repayments: With normal balances on two or more credit cards, you will have to keep notice of additional outstanding payment amounts and due dates in a month. In contrast, taking a single personal loan to pay off additional credit card balances strengthened the debt and lessens the inconvenience for the unruly lot among the credit card holders.
Flexibility in stabilising the tenure and EMI: Personal loans also let you the alternative of stabilising the tenure of your loan according to your own repayment ability. Far apart from credit cards where the normal balance has to be paid at one go to keep away the interest payment and penalties, the repayment of personal loan are made over a period of time. This permits you to rightly plan your repayment.
To sum up, it is always a better concept to pay off your financial debt in one go if you can bear it. Go for a personal loan only if you consider that your credit card debt as become too big to be paid within a month or two. Keep in mind, a personal loan is also debt that has to be paid back. It is essential for you to modify your investment habit that sets you with a troublesome debt in the first place.
The concept is to get a credit card consolidation loan with a lower interest rate than what you’re paying on your credit card as well as a set repayment period. That way, you get an outlined repayment plan.