What is the Best Way to Pay off your Debts?

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Many people in India are plagued by credit card debts and outstanding loans. If not managed well, these debts can balloon and erode one’s savings and reserves. A debt consolidation loan can pull you out of the debt trap and give you more control over your finances. Many NBFCs offer debt consolidation loans with attractive interest rates. Consolidation of your debts will help you get a better credit score and redeem your financial credibility.

Considering the easy access to credit in India, it is not surprising that most working people have several loans to be paid out in a month. The most common are home loan and car loan EMIs. There may be educational loans taken for the higher education of children. This would imply further monthly payments to be made. Apart from these there may be many credit card payments falling due on various dates.

It is difficult to keep track of all these monthly payouts. If the payments are being made out of different bank accounts, it becomes important to maintain adequate balance in all the accounts. Defaults may happen due to the complexity of managing several loans with different payment dates. Defaults on credit card payments can lead to heavy penalties and late payment fees. Default on loan payments can affect your credit score and erode your credibility.

A debt consolidation loan can be the answer to your debt management challenges. There are several ways in which a debt consolidation loan can benefit you:

  1. Single payment

Debt consolidation is the process of taking a single loan in order to pay off all your outstanding debts. Instead of making multiple payments on multiple dates, you will now be making a single payment every month towards your debt consolidation loan. A personal loan for debt consolidation can offer you a longer tenor, thus helping to reduce the EMI amount.

2. Stress reduction

Credit card debts and outstanding loans can take a toll on your mental health. Consolidation of your debts ensures that you have your finances under control and can focus on other, productive areas of your life.

3. Stop Collection Calls

If you have defaulted on several of your payments, there is every probability that you are being called by collection agencies. A personal loan for debt consolidation can help you to clear most of your debts. This would mean no more calls from collection agencies.

4. Lower interest rate

Personal loan interest rates are much lower compared to credit card interest rates. By using personal loan for debt consolidation, you can enjoy a much lower interest rate which would mean a lower EMI to be paid out. You can also get a longer tenor to pay off your loan.

5. Credit score

Late payments and defaults on payment can have a serious impact on your credit score. By consolidating your debts under a debt consolidation loan and paying the monthly payments promptly, you can redeem your credit score and enhance your credit worthiness.

You can have greater control over your finances by taking a Personal Loan for Debt Consolidation. Your eligibility for a personal loan can be easily assessed using the personal loan eligibility calculator. This is one of the best ways to pay off your debts and enhance your financial credibility.

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