The facility offered by banks/financial institutions to transfer the outstanding principal amount to another bank/financial institution is known as balance transfer.
The first advantage of a Personal Loan balance transfer facility is that the rate of interest is decreased, which in turn lowers the borrower’s interest burden through lowered EMIs. Generally, the new lender will offer a lower rate of interest on the loan transfer.
Are you struggling to keep track of multiple debt obligations and repayment schedules? Then a Debt Consolidation Loan may be just the right option for you. A tool that streamlines you existing loans and credit card dues..
You can take a Personal Loan as per your current eligibility to consolidate your debt obligations and streamline payments, while also improving loan terms. If you have had a very good credit history, banks may even offer lower, more competitive interest rates on the Personal Loan, thereby helping you bring down your overall interest rate.
- Credit card/s balance transfer to personal loan.
- Personal loan/s balance transfer to lower interest rate.
- Credit card/s and personal loan/s balance transfer to personal loan.
When Debt Consolidation Is Worth It –
Debt consolidation becomes advantageous when by compiling your debts together, you are able to achieve an overall lower interest rate. This allows for lower payments. This frees up cash that you can either use to make larger payments, or can save or invest the remainder. Debt consolidation also has a psychological factor, where some people find it is mentally easier to make one payment than multiple.
Debt Consolidation and Credit Scores –
A consolidation loan may help your credit score down the road. Paying off the loan’s principal portion sooner can keep interest payments low, which means less money out of your pocket. This, in turn, can help boost your credit score, making you more attractive to future creditors.
At the same time, rolling over existing loans into a brand new one may initially have a negative impact on your credit score. That’s because credit scores favor longer-standing debts with longer, more-consistent payment histories.
Also, closing out old credit accounts and opening a single new one may reduce the total amount of credit available, raising your debt-to-credit utilization ratio.
Debt consolidation is the act of taking out a single loan to pay off multiple debts.
There are two different kinds of debt consolidation loans: secured and unsecured.
Benefits of debt consolidation include a single monthly payment in lieu of multiple payments and a lower interest rate.
When debts are consolidated, longer payment schedules can result in a greater amount of total payment.