So you’ve got yourself into a bit of a financial pickle. In a moment of folly, you spent more than you should have and ended in high-interest debt. Your repayments don’t even cover the accumulated interest, let alone the principal, which means you’re in a debt trap.
How do you extricate yourself from this situation? The only option for you is to repay the high-interest debt by taking a loan at a lower rate. You can take a Personal Loan, use a Credit Card, or get Loans against Mutual Funds, Fixed Deposits or Loan against Property.
Personal Loan: Personal Loans come at an interest rate of 10 to 15%, with a tenure that ranges from one to 5 years. You can get a Personal Loan within 10 seconds if you are a selected pre-approved customer* or 4 hours if you are a non – banking customer*. Moreover, as a non – HDFC Bank customer, you may also need to provide documents when you apply for a Personal Loan. You can get a loan amount of up to 40 Lakhs, depending on your income level and your ability to repay the funds. When it comes to repaying the funds, you can easily do so, through instalments or EMIs.
Credit Card: Credit Cards have an interest rate of 3.5% per month. The tenure of repayment is 45 days, which is also interest free. While you can also pay beyond the given tenure, you will be charged interest on the amount borrowed on your Credit Card. You can also use your Credit Card to repay your complete debt instantly. The amount you can borrow against your card is normally determined by your credit limit. You can also apply for a Loan on Credit Card, if you need a higher amount. You don’t need to submit any documents when applying for funds through your Credit Card.
Apart from Credit Cards and Personal Loans, there are other options that you may consider:
Loans against Mutual Funds: You can take a loan from a bank or finance company by pledging your mutual funds as security for the debt. Since it is a secured loan with collateral, interest rates is on the lower side – say 10-12%.
Know more about applying for Digital Loan against Mutual Fund.
Loans against Property: Another way of extricating yourself from a debt trap is to take a loan against your property. You can get a loan for up to 60% of the value of the property, whether it’s a residence or commercial premises. Again, since it’s a secured loan, you can get lower interest rates.
Loans against Fixed Deposits: If you have Fixed Deposits in your bank, you can get loans against them. Banks usually charge between 2% and 2.5% above the FD interest rate for this loan.
Looking to apply for a Personal Loan? Click here to get started.
* Terms & conditions apply. Loan disbursal and Credit Card applications at sole discretion of HDFC Bank Ltd.
