- Low-interest rate: The interest rate on a personal loan is much lower than the interest rate charged on credit cards. While the interest rate on the remaining credit card can be as high as 45%, lenders charge 11.5-24% interest on personal loans. Today you can also choose the personal loan apply online option to apply from anywhere.
Easy to manage payments: With outstanding balances on two or more credit cards, you will need to keep track of multiple payment rates and monthly payment dates. Conversely, taking one personal loan to pay multiple credit card balances covers debt and reduces the severity of the indirect share among credit cardholders.
Flexibility in adjusting ownership and EMI: Personal loans also allow you to choose to adjust your loan period according to your repayment capabilities. Unlike credit cards where the outstanding balance must be paid at the same time to avoid paying interest and penalties, personal loan repayments are made over some time, from 1 to 5 years. This allows you to better plan your payment.
What to Remember When Using Your Loan Loan
Credit points: Since personal loans are unsecured loans, lenders readily accept loans from people with high credit scores. Otherwise, they charge higher interest rates or may reject a loan application. For this, you need to make sure you continue to pay the minimum amount required on your credit card. Alternatively, it will show us as a late payment on records affecting your credit score.
Borrowing Period: Your loan period will play a major role in determining the size of your EMI which can be calculated with the Vijaya Bank personal loan EMI calculator. Longevity will mean less EMI but will also lead to higher interest costs. The opposite is true for short-term applications. Choose a temporary loan, depending on your repayment rate and future cash flows.
Interest rate: The reason for taking out a personal loan is to replace the high cost of a credit card with a lower personal loan. For example, the Reserve Card of some banks attracts an interest rate of 40.2% per annum. (3.35% per month) while Other Bank charges interest rates of 15.75% to 20% per annum on its personal loans. As a small difference in the interest rate that can be the same as the big difference in your EMIs, compare the interest rates charged by different lenders with the prices in other options available, such as converting money into EMIs and anti-FD loans.
Prepayment charges: Many banks do not allow for the payment of personal loans in advance for the specified period. Most lenders have prepaid rates, often ranging from 2% to 5% of the remaining principal. Choose a mortgage loan that does not charge you in advance, especially if you expect to receive cash in the future. This will allow you to pay the rest of your money from any receipts or bonuses without earning extra money. The return from existing investments does not use your emergency funds or investments made for specific financial purposes to pay off your credit card debt.
Conclusion:
In summary, it is always a good idea to pay off your financial debt at once if you are able to repay it. Choose a loan only if you think your credit card debt is too high to repay within a month or two. Remember, a personal loan is also a debt that must be repaid. It is important to change the spending habits that put you in debt that cannot be managed in the first place.
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