Is taking debt to clear another debt does make sense? Yes, it does, and that is called consolidate debt. The term consolidates debt, in this case, is taking a personal loan to clear your outstanding credit card bills. It is just that you are not clearing anything because your debt still exists in another pile. Even though people opt for a personal loan to clear the credit card outstanding, here are the reasons:
Lower your Interest Rates:
The most sensible part of debt consolidation is to lower the interest rates. It’s always a great option to get a personal loan to clear credit card bills only when the interest rates of personal loan are low then your credit card debt. When the interest is lower it is possible for you to pay the more principal amount and get out of the debts soon.
To Consolidate Payments Into One:
Firstly, we don’t advice you to keep the credit card outstanding and apply for a personal loan to consolidate debts.
If there is a Case you are holding multiple credit cards and having outstanding bills on most of them, we suggest you take a personal loan and clear all your existing bills. So you can concentrate on paying one EMI. It is always a better thing to concentrate on one big EMI than multiple little issues. Instead, you can increase your credit score by getting a Personal Loan.
To Lower Your Monthly Payments:
By availing the personal loan for consolidating your bills, you can lower your monthly payments for the debts you have. You will be in profits if your monthly EMI for the consolidated debt is lower when compared to the total payments of credit card bills.
For example, If your paying 5000/- for all your credit card bills and the EMI for the personal loan you took to clear the credit card outstanding bills is 4000/- you are in a profit of 1000/- so you can put up this to your loan principal and clear your debt faster.
Try with InstaEMI:
Your best bet would be to try to find a bank or InstaEMI that may go for a high Rs, 50 Lakhs Personal loan Instant Approval. Keep in mind that your payments would be higher than your minimum payments on your 21% Credit Card but, the good news is that your Rs, 50 Lakhs Instant Approval Personal loan will be eliminated at the end of a set term (3 or 5 years).
If you just make minimum payments on your Credit Card, your balance comes down minimally and will take few years to pay off. At least get a lower rate card and even better, a term (3 or 4 yr. personal loan) CUT UP THE PLASTIC even if you get a lower rate card. Transfer the balance then cut the card up and pay cash for things.
The Online Personal loan with fixed payments and years is the way to go if you can swing the payments. In a few years, you will be “high as a kite…debt free”. Submit some applications. The worst thing you can face is rejection for personal laon. But I’m sure you will find one that says yes. They will pay off your card, cancel the account and you will cut the card up!
Why Late Apply For Personal Loan Online Now!