How a Smartcoin Personal Loan from can Help You Come out Of a Credit Card Debt Trap

These days, credit cards are utilised for much more than just purchases and instant credit. If you use credit cards responsibly, they can drastically reduce your transaction costs. They have also started to provide attractive incentives and discounts for using cards for payment. But because of these benefits and how simple it is to get quick credit, people who have trouble managing their money might end up overspending. They are therefore unable to pay their bills on time or in full. If the issue isn’t resolved, the high finance charge and late payment fee will quickly increase the balance. Applying for personal loan through best loan appscan end the cycle of debt.

The following benefits come with taking out a personal loan from Smartcoin to wipe off your credit card debt:

Reduces the overall cost of borrowing

Past-due credit card balances have a higher interest rate than the majority of other loan options. They are also referred to as finance charges and have rates as high as 49–50 percent. In addition to the late payment fee, you might be charged a penalty of up to Rs 1,000–1200 if the minimum amount owed is not paid. Conversely, the interest rates on personal loans vary from 12 to 26 percent per year, contingent on various factors such as the loan amount, credit score, employment history, and so forth.

Management of repayments becomes easier.

Those who have multiple credit cards with outstanding balances will need to keep track of multiple EMIs and due dates, even though some credit cards allow past-due balances to be converted into EMIs. Rather than paying off each credit card bill separately, you can opt to consolidate all of your debts into a single loan with a single interest rate, term, and EMI date by selecting a personal loan from Smartcoin.

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Gives you back the interest-free period.

The time frame between the date of a credit card transaction and the billing cycle’s due date is known as the interest-free period. This period could last anywhere from 18 to 55 days, depending on the situation. Interest will not be assessed if your credit card debt is paid off in full before the due date. If you don’t pay the balance in full, you risk losing this benefit on subsequent credit card purchases and incurring finance charges from the time the transaction is made. By taking out a Smartcoin personal loan, you can extend the interest-free period on your credit card, pay off your current debts in full, and use your credit card frequently without accruing interest. 

You can pay off all of your outstanding debts with the aid of a personal loan. Before taking out a personal loan to pay off credit card debt, take into account the following:

Refrain from submitting multiple Direct Loan applications simultaneously.

The lender in the best loan apps will ask one or more credit bureaus for a copy of your credit report when you apply for a loan so they can assess your creditworthiness. Your credit score is lowered by a certain number of points for each hard inquiry—also known as a soft inquiry—that the credit bureaus record on your account. Applying for multiple personal loans at once will limit your options and hasten the deterioration of your credit report. Instead, consider loan offers from online financial markets; these are known as “soft inquiries” and won’t negatively impact your credit report the way hard inquiries from banks will.

Based on your ability to make the EMI payments, determine how long the loan will last.

A longer loan term results in a smaller monthly instalment payment but a higher interest expense, whereas a shorter loan term results in a larger monthly instalment payment. Consider taking out a shorter Smartcoin loan term rather than a longer one if you can comfortably make your monthly installment payments by the due date without compromising your commitment to significant financial goals. 

Additionally, compare other loan options.

When compared to other lending options from the best loan apps, like a loan against gold, real estate, or stocks, for example, a secured loan option is usually less expensive than an unsecured loan option, like a personal loan. They also vary in terms of the terms of repayment. Credit card holders can also benefit from the introductory interest rate period by transferring their outstanding balances to another card via the balance transfer feature, in addition to these secured loan options. The transferred amount may be subject to a reduced or zero interest rate for a short period of time, typically up to six months, depending on the circumstances. In addition, cardholders can choose to refinance into monthly payments for any outstanding balances at a rate that is substantially less than the initial financing charges.

Check out online financial marketplaces to compare the interest rates that different lenders in the best loan apps charge for personal loans and other kinds of alternative loans. Make sure you ask questions about credit balance transfers, EMI conversion, and other options with your current and prospective credit card issuers before making a decision.

Analyse the returns on your existing fixed income investments.

Fixed income investments, such as debt funds and bank FDs, usually provide lower returns than best loan apps used for taking Smartcoin personal loans. Rather than using your emergency funds to pay bills, you might think about selling your fixed income investments if your short-term financial goals are to be met. You’ll be able to prevent taking out bigger loans by doing this. Unexpected financial challenges may necessitate taking this course of action.

Lastly, keep in mind that if you do not pay off the remaining amount on your credit card debt, interest rates and financing costs could push you into severe poverty. Try to avoid debt as much as you can, but if you do wind up in it, make sure you pay it off right away.

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