How You Can Use A Personal Loan for Debt Consolidation

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How You Can Use A Personal Loan for Debt Consolidation

  • Highlights

  • Various lenders can drown you in hefty EMIs and mounting rates

  • Personal loans club all your dues into a single payout

  • It offers lower cumulative interest rate than most credit card providers

Monetary debt from various lending instruments like credit cards, home loans, etc., can drown you in hefty EMIs, mounting interest rates and multiple debt accounts. You may end up looking for quick and easy ways to pay off all your debt and may even go to the extent of emptying all your savings towards this end. However, there is a better option.

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Non-Banking Finance Corporations (NBFCs) offer personal loans at competitive interest rates that can be used for your debt consolidation. You can use the loan to pay off multiple balances and then pay the personal loan back in easy monthly payments for a set tenor.

You also can use personal loans to pay off multiple credit cards by consolidating them all into one payment with one interest rate.

This helps you to keep track of multiple payouts and balances every month and club all your dues under one single umbrella.

Get a potentially lower interest rate

Personal loans generally charge lower interest rates than most of the credit card providers. Using a personal loan for credit consolidation can substantially lower the amount you pay as interest.

Personal loans charge simple interest and it’s much easier to make one loan payment per month instead of four or five or six credit card payments.

Additional Read: Fees and Charges on Debt Consolidation Loan

Make a single payment each month

Moving debt from multiple lenders or debtors from one loan debt can simplify your credit pay-off. You don’t have to keep track of various debt accounts and ensure timely pay-outs.
Also, one payment instead of several could help keep you on track and organized with your bill payments.

Repay your debt with a Personal Loan

Use your personal loan your way

Benefit from a quicker debt pay-off

You can pay-off your loan in a short span of time with one payment every month and a fixed interest rate. Most credit cards don’t have a set repayment periods. If your balance is high, you can never get out of your debt by paying minimum balance every month.

Additional Read: 4 Ways to Consolidate Your Debt

Personal loans generally have three to five years of loan term and hence you can plan out your loan pay-out and monthly installments. After paying your loan as agreed, all your consolidated credit would be paid in full by the end of the month.

Raise your flexi loan limit

If you avail a personal loan and repay it within time frame, you are allotted merits to enhance your loan limits. If handled properly, personal loans are an efficient way to improve your loan limit for future.

Whether you are looking to lower your monthly payment or pay off debt faster, a debt consolidation loan can help you reach your goal. A personal loan for debt consolidation can help eliminate debts faster and put you back on the right track.

DISCLAIMER:
The personal loan features mentioned in this article are subject to change, based on policy revisions. For the updated product details, please visit the Bajaj Finserv Personal Loan page here.
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