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Should I take a personal loan to pay off credit cards?

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A lot of us think about using a personal loan to clear our credit card debts. But, is it really a good idea? The main goal is to get rid of debt.

Getting a new loan doesn't really solve the problem; it makes it worse because of a number of reasons:

More Debt, More Stress: Consumers who are already short on funds are the ones who think of taking out a loan to pay another. This adds to the financial burden and induces emotional stress as the EMI payment dates draw near.

Risk of Default: The inability to make the payments on your personal loan could put you at the risk of default. This could impact your credit score.

Shift in Behavior: When using a personal loan to pay off the credit card debt, you free your card for usage with ready credit available at hand once again. This could lead to the accumulation of debt further if spending habits do not change.

It is essential to carefully evaluate your financial situation and understand the root cause of the debt to avoid falling into the same trap again. Calculate your earnings versus your expenditure. Budgeting is a stepping stone to gradually knock off any kind of debt. You can start by working on eliminating the smallest amount first.

We understand that managing your money for debt repayment every month and dealing with stress can be tough. It is advisable to seek professional help that will help you get out of this situation sooner using a personalized and structured approach.

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