Is Converting Credit Card Debts Into Personal Loan Beneficial?
Posted on Tuesday, August 30th, 2016 | By IndusInd Bank
Availing a personal loan to pay your credit card debt has become a common tool to get rid of the debt spiral. Today, credits are easily available. There is absolutely no system to caution you about your credit management capacities. And access to multiple credit cards, coupled with the above, lands you in a debt pool sooner than you can imagine. Thereafter, all your energies are focused on clearing the debt amounts, which, in spite of all your efforts and inhibition, keep piling up. Your budget and savings derail and the situation continue to get worse. At such a juncture, a personal loan comes as a relief as it gives you the option of consolidating your many debts in one single debt. Moreover, the attractively low interest rates give you a sense of control and hope.
Converting your credit card debt into a personal loan may seem like a good move but without a proper debt repayment plan in place, it could only add to your problems.
Few things to consider while opting for a personal loan to deal with your credit card debts:
Clear Credit Track Record:
A good credit record assists you in satisfying both your personal and professional needs. For availing good products and offers, financial institutions need to be presented with a good track record that suggests that you have always been in a position to handle credit responsibilities effectively.
The strength of any financial plan can be determined by whether it can generate results within 5 years. You should plan your personal loan in a manner that it can be paid within the next 5 years at the latest. If not so, other options need to be considered.
If you have determined that your debts are not manageable in your current financial scenario, it is time to see a credit counsel. It always makes one skeptical and a bit unsure to seek professional help for any matter whatsoever, and particularly for matters relating to credit. But such professionals exist and are well equipped with the knowledge and financial modules that will help you regain your financial soundness. These professionals are called “Credit counsellors”. They formulate debt repayment plan for you after considering your financial constraints. They also help you with your budgeting, saving and credit score improvement.
Debt repayment is a task which is easier said than done, but if you stick to your plans and have faith in the financial system, you will surely reach the shore of financial harmony.