5 Ways to Save Your Money Through Personal Loan
Everyone faces an emergency at some point where they need quick cash. At such times, availing of a Personal Loan can be helpful. This article gives you an insight into how personal loans can help you save money.
A large number of people in India apply for Personal Loans to help get quick cash to meet an immediate expense – be it a medical expense, repairing the home or buying a consumer product. Apart from helping you to get the money you need without incurring a hefty rate of interest, a Personal Loan can also help you improve your credit score. Let us look at the different ways a Personal Loan can help you save money in the long-run:
Consolidate the debt of Credit Cards
If you are finding it difficult to pay off your Credit Card debt or if your minimum monthly payment is too high for you because of the high-interest rate, availing of a Personal Loan at a low interest rate could be a suitable option to pay off your debts and save money. Typically, Credit Cards have a high-interest rate of about 20% per annum. In India, the interest rate on Personal Loans varies from 8% to 12% per annum. Hence, you can avail of a Personal Loan to pay off the Credit Cards and save a significant amount on the total payout.
To meet a big expense
Everyone, at some point in life, faces a situation where they need cash for a big one-time expense. By applying for a Personal Loan, you not only get quick cash but also the liberty to repay the money over the years in smaller instalments. Besides, a Personal Loan is a far cheaper way than using a Credit Card for a big purchase since the interest for the loans is much lower than that of Credit Cards.
Improve the credit score
If you have a huge Credit Card debt and are utilising the maximum credit limit of your card, your credit utilisation score will be higher, and the lenders will categorise you as a high-risk borrower. This is where the Personal Loans are useful, when you borrow a loan, you have a fixed period to repay the full amount. And if you repay the loan in full, it not only helps you lower your credit utilisation, but also improves your credit score.
Avoid the pesky hidden fees
Oftentimes, the Credit Card holders complain about the Credit Card companies charging them additional costs. Most of the times, these additional costs levied are the hidden costs, which the users are unaware of. This is where Personal Loans are a better way to fund a big expense rather than using the Credit Card. If you carefully vet the details of the loan agreement, you can be sure that there are no additional costs that may creep up over time.
Once you repay the loan within the agreed terms, you won’t have to pay any additional fees or interest, which could potentially save you a significant amount.
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