We often face situations in our daily lives where we cannot pay or ignore purchases or expenses. With kids, it adds to the factor. Numerous formal and informal unavoidable occasions, such as school fees, family functions, healthcare problems, wedding expenses, travel expenses, and so on, can be due to a lack of cash. Willingly or unwillingly, we are forced to spend to keep things up and running.
Priyanka Dubey, a resident of Jaipur, had a terrible experience getting into debt and paying credit card bills. However, a personal cash loan in Singapore is much cheaper than a credit card. Her frequent purchases increased the expenses covered by credit cards. This is where she needed wealth in simple trade.
The untimely payment of dues increased, so she had to stop using all her credit cards. Priyanka was worried about how to get out of this vicious debt cycle. After long research, she found that a personal loan for debt consolidation could help her get out of this financial crisis. So, she applied for a personal loan to clear all her dues. Like Priyanka, how you can also use a personal loan for debt consolidation is described below.
Personal loLoanor debt consolidation
Like a credit card, a personal loan is an unsecured debt; you don't have to submit any documentation to get one. However, a personal loan is much cheaper than a credit card. The interest rate applicable on a personal loan (10% to 18% per annum) is much lower than that on a credit card (2% to 3% per month). If you don’t do your credit card, the interest rate will increase dramatically. Also, missing a single payment can hurt your credit score badly, making it very difficult for you to get credit from banks and other financial institutions.
As personal loans are cheaper, you can use them to pay off your credit card bills and other expenses on time. By using a personal loan for debt consolidation, you not only pay your credit card bills on time, but you also increase or repair your credit score.
Personal loan interest rates from leading banks and NBFCs are as follows:
Personal Loan
Bank Interest Rates* Processing Fee
SBI
|
11.00%
|
In the range of 0.5% to 1%
|
HDFC Bank
|
15.50%
|
Up to 2.50% of the loan amount (Min Rs. 1,999; Max Rs. 25, 000)
|
ICICI Bank
|
11.25%
|
Up to 2.25% per annum of loan amount + GST
|
Bajaj Finserv
|
12.99%
|
Up to 3.99% of the loan amount/td>
|
Citibank
|
10.99%
|
Up to 2.0%
|
It lures the user to continue using the card more often in the greed to accumulate points. It is hyped to be your best friend in times of crisis, and plastic usually proves to be one. However, one should keep the usage to a minimum. On one side, it is argued that discounts, cashback, and interest-free periods of 45-55 days, if used recklessly, ruin credit history and land one in debt.
Usually, one person possesses an average of 2-3 credit cards. The outstanding amount keeps increasing with every expenditure, only to realize that one has already splurged too much. Lifestyle changes to maintain social status inadvertently force one to get trapped in the web of numerous dues whose effect snowballs.
Reasons to Avoid Relying on Credit Cards
Credit Card Purchases urge one to spend more than budget. When one pays in cash, it feels like the purchase goes out of hand. Considering this, one will stop the purchase when one feels it is unnecessary or the purchase can be delayed. One will physically understand the urgency of buying the product if one must pay cash from pocket. Unless it is of dire need, a person either ignores or cancels the plan.- Adding Stress - Peace of mind is of prime importance compared to buying a product that might not be affected if the purchase is not made. It would be irrational to lose one's over one's oneself and decrease someone.
- Hampers Credit Score—Unpaid credit card bills severely damage a person's property significantly when one tries to get a home loan in the future. Many times, a defaulter is denied the disbursal of loans.
It affects the spending pattern and intermingles with the household budget. Try postponing impulsive buying to make the right decision. Review the spending pattern and the areas where it can be brought down. It will surely keep the budget in control.
Here, someone should consider availing Here' personals to consolidate all the debts.
- Lower Interest Rates-Personal loan charges are much lower than the interest rates paid for combined credit cards. It becomes wise to go for personal loans and pay off debts and dues.
- Easy Tracking Of EMIS—Repayment done through EMIS needs a track. Missing even one adversely affects the credit score, thereby affecting one’s reputation. This, in turn, creates difficulty in obtaining any kind of loan in the future.
- Fixed Tenure – Usually, 1-5 years is the tenure for repaying personnel. Within this period, the borrower is required to pay the loan amount. When one is aware of the EMI deduction every month, the plan to repay the loans is in process.
Why One Should Consider Availing Personal Laon for Debt Consolidation
Below are key pointers for considering Personal Loans to consolidate debts.- Online Application—You can apply for a Personal Loan from the comfort of your home. This gives you the advantage of comparing various lenders before you decide which one to go with.
- No Collateral/Security—Unlike other loans, no security is needed to submit. This makes availing of Personal Loans much easier.
- Flexibility - From 1-5 yr, one can choose the tenure for loan repayment. As per one sent ability, it gives the flexibility to choose according to the ability to repay.
- Quick Disbursal—Once all papers are in place, the lender approves the amount applied for. The transfer is made to the borrower's.
- Prepayment facility borrower's payment helps you pay off debts in advance rather than over a fixed tenure. However, one has to pay a nominal fee before paying the amount.
