Credit cards today are used by nearly every other person. They come in handy not just in times of emergencies, but also to finance other daily needs or luxury purchases. Whether it is a vacation or the latest phone or a dress, credit cards help people buy what they want right now without having to wait for a distant future to make their dreams come true. Unlike older generations that paid for almost everything by cash and had careful spending and meticulous saving habits, today’s generation is the one of instant gratification. This is where credit cards come in as the perfect accessory for anyone who doesn’t believe in delaying the life of their dreams just because they don’t have the cash today to finance them.
That being said, there are also downsides to the credit card lifestyle. People often tend to overstep their limits when using a credit card resulting in mountains of debt later on. This can adversely affect not only your peace of mind, but also affect your credit score. Credit scores are decided by a number of factors, such as the length of the credit period, the credit history,the types of loans taken, new debt, and total debt owned. This will play a factor later if you apply for a loan, whether it is a home loan, personal loan, vehicle loan, or any other. So, having a good credit score is of paramount importance.
If you are lagging behind in your credit card payments, this can affect your peace of mind which will spill over into other areas of your life as well. Is this worth the stress? Is there anything you can do right now that will help you deal with your credit card debt and make it go away, just like the Crocin you take to alleviate the headaches you get when you see your credit card bills every month? Yes, there is and it’s a personal loan that will help you consolidate your credit card debts all in one place. Here you will find everything you need to know about this.
Benefits of taking a personal loan to finance your credit card debt
1. Consolidation of debt: Whether you have just one credit card or more than one, taking a personal loan to pay off the debt gets all your debts into one place, or under one umbrella.
This makes it easier for you to track your payments and also to plan your monthly budget.Of course, this will work better if you can avoid raking up further bills on your credit card until the existing ones are cleared. This will help in creating financial discipline that will stand you in good stead in the future.
2. Lowered monthly payments: When you consolidate your credit card payments by using a personal loan, you may find that your monthly payments for the personal loan are much lower than the payments for your credit card payments. Since you are saving money every month, the extra money can also be used to pay off the principal on your personal loan.
3. Lowered interest rates: The personal loan may have a lower interest rate than your credit card repayments. This means you can then pay off more of the principal amount every month, which then will result in your loan being paid off in a much shorter period of time.
Factors to keep in mind when applying for a personal loan
There are several factors to be kept in mind when applying for a personal loan. These are the
loan amount, interest rate, repayment tenure, prepayment charges, processing fees, etc.
Understanding each of these will help you decide on the right amount to apply for and also help you better manage your finances every month. There are some lenders that offer specific loans for debt consolidation and it may be a good idea to look into those as well.
Flexi-personal loans can also be used to settle old credit card debts. These are loans with a pre-approved limit that require minimal documentation, have a faster disbursal time, and lesser interest to pay each month since you only have to pay interest on the amount you have withdrawn from the loan. When applying for a personal loan, you can also pay back the loan amount, whether it is the principal or the whole amount, as and when you get an extra load of cash in hand.
Make sure that your personal loan does not charge pre-payment fees. If you are sure you are getting a lumpsum in the future, use this wisely to pay off your personal loan and your credit card problems will be a thing of the past. Ensure that your credit worthiness does not suffer and that you can sleep well at night knowing that you don’t have any more debts to pay. All it takes is a personal loan to sort this out.