Piling debts from multiple loans or credit card dues can often put borrowers in financial distress. The charges one might have to face from insolvency can range from asset loss to legal proceedings. Additionally, these debts can negatively affect a borrower’s credit score.
Hence the question arises: how to tackle the outstanding debts without incurring further losses?
One of the best ways to tackle outstanding debts is by debt consolidation and clearing it through personal loans. You can apply for a loan here:
In this comprehensive coverage, we look into five reasons as to what paying off credit card loans through personal loans can prove to be fruitful.
Reasons Why To Opt A Personal Loan To Pay Debt
1. Faster debt clearance
Managing payments and dues from multiple sources can prove to be tiresome, often leading to missed or delayed payment. By opting for personal loans to pay off credit card dues, borrowers consolidate debts from several sources to a single debt at lower interest rates. It not only takes away the financial distress from the borrower’s shoulders but also opens opportunities for better financial planning.
However, borrowers should ensure the utmost responsibility to stick with repayment schedules of personal loans. Borrowers who handle repayment irresponsibly can further cause their credit health decline and hence low credit scores.
2. Personal loans don’t require collateral
Unlike other credit tools available in the financial market, personal loans are unsecured and do not require a collateral. This facility ensures that borrowers do not further lose any of their assets by availing personal loans.
Lenders like Fullerton India offer personal loans with loan amounts upto Rs. 25 lakhs.
With personal loan interest rates ranging from 11.99% to 36%, these loans are smart and flexible solutions.
Also, most of the lenders provide online access to borrowers which help them in staying in track with their EMI repayment schedule and statements.
3. No hidden charges, more straightforward eligibility criteria
Clearing debts in itself is a tiresome process. Personal loans offered by most lenders are hassle-free with minimal documentation needs and more specific eligibility criteria. Documents required for personal loan sanction include:
- ID proof
- Age proof
- Address proof
- Salary slips
- Bank statements
- Income tax return documents
Applicants should attentively go through the eligibility criteria of lenders before making an informed decision as they vary from lender to lender.
Applicants can also choose their desired lender by comparing the eligibility criteria through the eligibility calculators available online. Applicants can also compare EMIs and personal loan interest rates offered by various lenders using Personal loan EMI calculator.
Lenders like Fullerton India also assure transparent processes to its customers by ensuring no hidden charges or fees.
4. Faster fund access
Time is a huge constraint when it comes to resolving debts. Through personal loans and their uncomplicated eligibility criteria, the fund disbursal is faster.
Lenders like Fullerton India assure fast disbursal as quick as 30 minutes once all criteria are met, and verifications are completed.
Flexible repayment schemes and better interest rates, personal loans are the most viable solutions for a credit card due to repayment.
5. Improve credit score
As borrowers repay their dues, their credit score starts rising. As personal loans are not included in the credit utilisation ratio, debt consolidation through personal loans boosts credit scores.
Paying off high-interest credit cards through personal loans help borrowers mitigate their dues faster. With lower interest rates and flexible repayment schedules compared to credit cards, personal loans help borrowers manage their funds better without further losses. Simpler eligibility criteria of personal loans pave ways for faster disbursal and easier access to funds.