Are credit card bills haunting you? It is very easy to get trapped in a debt cycle and in case of a credit card which is an expensive line of credit, because you aren't spending real money, the illusion can be misleading. A very important thing to know about credit cards is that the rate of interest is usually very high and can go up to 47% whereas the rate of interest for a personal loan can fall anywhere within the range of 15-25%. Paying credit card dues on time is a healthy habit but one missed payment can prove to be extremely harmful as it can multiply into a bigger amount. If you're facing a shortage of funds, you can consider taking out a personal loan to clear your credit card dues.

Following are a couple of benefits of doing so -
  1. Low-interest rates: Interest rates on credit cards are comparatively higher when compared to personal loans. On a personal loan, you can be charged an interest of anywhere between 10-24% whereas, on a credit card, you may be charged as high as 47% which will result in debt multiplication in no time. Hence, it's a no-brainer to go with a personal loan instead of a credit card debt.
  2. Consolidated payment: If you have multiple credit cards, then payment can be a little difficult to manage. Instead, you can opt for a balance transfer which consolidates all your credit card dues into one loan at a lower rate of interest. You can choose a loan tenure of 1 to 5 years and repay the entire amount in monthly EMIs.
If your lifestyle is heavily dependent on a credit card, you may want to cut back on using it since it brings along the burden of a heavy debt if the dues aren't cleared on time. It's an expensive line of credit and should be used only in case of emergencies. Meanwhile, if you have a huge debt on your credit card which you are unable to clear you can look at taking a personal loan. A personal loan can be paid off in easy monthly EMIs which are calculated based on a lower interest rate as compared to the interest rate charged on a credit card usage. So, make the wise choice and opt out of paying your dues at a ridiculously high rate of interest.

Learn more about your Personal Loan Eligibility here.

* Terms & conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.