Woman with credit cards and unstoppable shopping habits are known to be shocked with credit card bills. But jokes apart, if one spends much more (on credit cards) than what one can repay, then interest charges can become very high.
To avoid paying interest, one has to clear off all the card dues before the interest-free period. If not, the rates applicable are at times more than 40%!! True that these rates are exorbitant. But that is no excuse for not being careful about handling credit card outstandings.
If you find it tough to manage huge credit card dues, then there is a simple and smart solution. You can simply take a personal loan to clear off all your credit card dues in one go.
You might ask as to why it makes sense. Its fairly simple.
Interest rates on personal loans are much lower than that on credit card outstandings. At one end credit cards can charge 40% plus whereas on other end, personal loans are available from 15 to 20%.
Another benefit is that if you have multiple cards, you can simply all the hassles of multiple repayments by taking one personal loan to repay outstandings on all your cards. It will make your financial life simple. That’s not all. You also have just one simple clear repayment schedule where you know exactly how much EMI you have to pay and when. No need to wait and be shocked by multiple credit card bills.
Another benefit that many people don’t know about is that clearing off high-interest loans (credit card dues) can help you improve your credit score.
All in all, taking a personal loan to consolidate and clear off all high-interest card dues makes a lot of sense. So think about it and if you find yourself in a situation of unmanageable card debt, consider taking a personal loan.