Juggling too many loans? How to consolidate your debt with a Personal Loan

High-cost debt can be a pretty stressful. It can take a toll on your finances and even affect your short and long term financial goals. If you have taken on a lot of high-cost debt, the mounting EMIs and interest rates may compel you to dip into your savings and emptying them. However, there is another option that can come to your rescue – taking a lower-cost, long-term Personal Loan for debt consolidation. Here’s why it may make sense to consolidate your debt with a Personal Loan.

Single EMI vs multiple EMIs: When you consolidate your debt with a single Personal Loan, you can structure your EMIs. You do not have to keep track of the various EMI dates, or panic if you miss paying the EMIs, which can attract penalties. It is certainly easier to make a single loan payment via EMI every month as opposed to 3-4 different EMIs. As the name suggests, a Personal Loan for debt consolidation, allows you consolidate all your EMIs into a single EMI, and pay off your debt.

Debt consolidation for credit card debt: Credit cards are highly convenient as you do not have to pay upfront cash. However, you must pay off your credit card dues on or before your statement date. If you fail to pay off your credit card dues on time, you will have to pay penalties. Credit cards typically charge a higher rate of interest than a Personal Loan. Instead of using revolving credit on your cards, you can take a single Personal Loan which allows you to pay a lower interest rate on your debt. You can also pay it off in easy EMIs over a period of time.

Quicker debt pay-off: A Personal Loan comes with a fixed EMI and interest rate over a stipulated tenure; one which ideally lasts from 1 to 5 years. Once you have consolidated your debt, you can also pay off your loan in a short span of time, with a single payment each month, at a fixed rate of interest. Since credit cards generally do not have any set repayment periods, people tend to ignore the fact that the interest rates keep accumulating until the debt is paid.

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Read more on how you can snap out of a debt trap with a Personal Loan here.

*Terms and conditions apply. Personal Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.