A credit card is a very reliable source for accessing funds in times of need. You can use a credit card to take care of numerous expenses such as paying off utility bills, shopping, taking a vacation, and even for financial emergencies. You pay off all the expenses and then clear the credit dues later along with the added interest. While this can be very useful in effectively managing your finances, misusing a credit card can also lead to financial hassles. Missing out on credit card payments can simply keep adding to your debt which then negatively affects your credit score.
So, how do you deal with the gathered credit card debt? One solution is to apply for a personal loan to pay off all your credit card dues. But is taking a loan to pay off your credit card debt a good idea?
1. You can get a high loan amount to clear off your entire debt
You might need a substantial amount to clear your dues if your credit card debt has snowballed over time. Now, the personal loan amount you are eligible for would depend on your financial profile, capacity to repay the loan, and the bank's terms and conditions. For example, with IDFC FIRST Bank, you can apply for a personal loan of up to Rs 1 crore. You could take care of a lot of expenses with this amount, which makes the decision to apply for a personal loan to clear your credit card dues a smart one.
2. You can arrange for the loan in no time via a digital loan application process
When it comes to consolidating debt, more often than not, time is of the essence. You want to arrange for funds and might not have time to go through a lengthy loan approval process. The good part about applying for a personal loan in this day and age is that you can apply for one without even stepping out of your house. With banking processes being digitised, you can now submit your loan application online within a few minutes. IDFC FIRST Bank offers a completely paperless online application process with no physical documentation required. This means that you can instantly get the required loan amount disbursed without any hassles and use the amount to pay off your dues.
3. You can get flexible tenures to pay off the personal loan
To comfortably pay off your loan through Equated Monthly Instalments (EMIs), you need to have a repayment tenure that suits your financial situation. Applying for a personal loan to pay off your credit debt will only be a good move if the bank you choose is offering a suitable tenure to pay off the loan's EMIs. This is why you should consider looking at IDFC FIRST Bank's personal loan plans since they offer flexible loan tenures that range from 6 months to 84 months.
4. Personal loans can offer lower interest rates
A competitive interest rate is one of the main factors based on which you should decide whether to go for a personal loan and consolidate your debt. If you are not getting a decent interest rate, transferring your debt would not make much sense as repaying the dues with a high interest rate would not ease your finances. Make sure to find a bank that offers a competitive personal loan interest rate which would help in clearing your credit card dues. IDFC FIRST Bank offers a competitive personal loan interest rate starting at 10.75%, which means that the loan amount can be paid off in affordable EMIs.
5. You can get a personal loan without providing any collateral
Some people are apprehensive about applying for loans because they are concerned about pledging collateral. However, this is not a problem when it comes to personal loans. With IDFC FIRST Bank, you can get aninstant personal loan easily without having to provide any kind of collateral as security.
To sum it up, finding a bank that offers attractive personal loan terms can make applying for a loan to pay off your credit card debt a good decision. Before applying for the loan, ensure that your bank provides you with the required loan amount, a competitive interest rate, as well as a suitable tenure to comfortably pay off the loan.
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