A personal loan is a great financial tool for several reasons, such as the fact that it is unsecured and easy to avail. Due to its flexible nature, a personal loan serves as financial aid without limitations on end usage. While it can be used to address needs such as an urgent medical treatment or home repairs, it lends itself to another important cause: debt consolidation. Credit card debt can pile on even more easily than any other form of debt. With increasing interest and accumulating bills, repaying your borrowed sum can become even more difficult. So, if you are wondering, ‘How do I clear debt quickly?’, a smart way out of this debt trap is to use a personal loan to pay off credit card debt.
Borrowing more credit in the form of a personal loan to pay off old credit dues can be beneficial. Read on to know more about this as well as find answers to questions like, ‘How can I clear my credit card debt?’, Is it a good idea to get a personal loan to pay off credit card debt?’ and ‘How does taking out a personal loan affect your credit?
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Offers Reasonable Interest Rates
There are multiple benefits of using a personal loan online to clear your previous debt’s, but among the best is the fact that personal loan interest rates are more affordable in comparison to those of credit cards. Additionally, using a personal loan enhances financial flexibility when clearing multiple debts as you’re only making one monthly payment at a given interest rate rather than paying multiple dues at different deadlines.
Personal loans are effective at consolidating debt as they offer you a relatively high loan amount without needing you to pledge collateral. With reputed lenders such as Bajaj Finserv offering up to Rs.25 lakh, you can easily pay off credit card debt that has been attracting interest rapidly. Employing this method will save you a significant sum on interest payments as it a quick way of clearing debt and allows you to focus your effort into rebuilding your finances without the worry of compounding interest costs.
Longer Tenors Amount to Lower Monthly Payments
With a personal loan, you have the ability to choose a comfortable loan tenor and don’t have to worry about incurring additional interest the very next month or in the next billing cycle. Further, when you choose a longer tenor, your EMIs are lower, which is beneficial in two ways. You clear your credit card debt easily with lower EMIs and are no longer incurring high credit card fees and you’re also consistently making payments, which helps improve your CIBIL score.
Helps Improve Your CIBIL Score
There are multiple benefits of a good CIBIL score, one of which is the ability to obtain the loan amount of your choice and at a lower rate of interest. Utilising a personal loan to consolidate debt is a great way to improve your CIBIL score. While your CIBIL score may drop right when you apply for a personal loan, it rises up again once your credit card dues are paid off. Further, by paying the personal loan EMIs on time, your credit score continues to increase. Repaying your personal loan is also easier as it has a lower interest rate, giving you affordable EMIs to repay.
Regardless of whether you use personal loans or credit cards to address expenses, the issuer plays an important role in determining how easy and pocket-friendly your experience is. When it comes to consolidating debt with a personal loan, apply for the Bajaj Finserv Personal Loan that offers instant personal loan approval and 24-hour loan disbursal. You also enjoy the flexi personal loan feature, which allows you to borrow from the sanction in parts and only pay interest on what you actually withdraw.
Moreover, you can choose to pay interest-only EMIs and repay the principal at the end of the tenor to manage your cash flow better. All of these benefits available at nominal interest rates make personal loans a great financial tool for debt consolidation. To get started, check your pre-approved offer and enjoy a hassle-free personal loan approval online.