Often when you witness a huge flared credit card outstanding bill, you tend to overreact or you are taken aback as a major chunk of your monthly income is drawn out towards clearly this debt. You may even start analysing where all you could compromise in order to save some bucks. What if you were told that it is not an alarming situation and that you could leave behind the thought of postponing trips or other expenses on the list. Yes! There are multiple tools available in the market that can help you bring your finances back in order without any compromise. Take a look -
1. Personal Loans
Different credit card companies charge 24%-36% interest per annum. However, you can get a personal loan at an annual interest rate of 10.50%-20%, depending on your creditworthiness. So, if you opt for a personal loan, you could not only pay off your outstanding dues in one go but also, you will dispense a lower interest rate towards your loan. Your monthly outflow will reduce, making the payments more manageable and less stressful. This makes servicing the loan more affordable.
2. Debt Consolidation
As the name suggests, debt consolidation allows you to opt for one single loan to pay off all the existing debts incurred by you. It eliminates the hassle of dealing with multiple vendors and payment due dates every month and gives you the ease of dealing with one single loan account. You will end up paying a lower interest rate eventually reducing the EMI amount every month. Making the loan more affordable. While consolidating your debts, you can opt for either a secured loan or an unsecured loan personal loan. If your debt amount is larger, a secured loan is a better option since it involves a lower interest rate and loans you a higher amount. Unsecured loans are available at slightly higher rates, but you will not be required to pledge an asset against this kind of loan. The loan period for unsecured loans is generally shorter than that for secured loans.
3. Balance Transfer and Personal Loan Balance Transfer
A balance transfer is a process in which you are allowed to transfer multiple credit card balances to one that offers a lower interest rate. During promotional periods, many financial institutes offer balance transfer cards with no or very low-interest rates for the first few months. If you wish to opt for a zero-balance transfer card, you would need a healthy credit score. But you still would be liable to a balance transfer fee that will be charged during this process. It is particularly important that the credit card for balance transfer has enough credit limit for paying off your debts. The limit should not be maxed out after the debt payment.
Credit Card Takeover Loan
A customized Personal Loan that you can consider is a Credit Card Takeover Loan. This is a kind of Personal Loan that is specially designed to assist you to pay off all your credit card outstanding debts from either one or multiple credit cards. This loan offers lower interest than that imposed on credit cards. Credit Card Takeover Loan charges an interest rate of somewhere between 16%-20% interest as opposed to 24%-36% charged by credit cards. This loan helps you clear all your credit card debts in one go, thus improving your credit score.
So, you needn’t fright away from credit card outstanding debts, just need to choose the most suitable tool for debt consolidation and say goodbye to high EMIs!