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So you went out one fine day and maxed out the limit on your credit card because of the irresistible Prada handbag you would never have dreamt of 5 years ago, when you did not have that Platinum Card with you? Welcome to the club. Not the Prada lured club, but, it is a club none the less, for we have all got into that loop sometime or the other where in a moment of impulse, we swiped it for a material (or immaterial as time rolls by) gain we regret month after month in terms of interest payouts. Little education has been done in right earnest for such victims because there is one full proof getaway from this situation (No, I am not talking about crossing borders) Get a personal loan instead. Before you start giggling at this outrageous thought, let me tell you why this makes sense. For your credit card payout, there is an interest of at least 22% being levied on you (this differs from card to card but this is the minimal interest rate). An unsecured personal loan carries an interest of 14-16% which is a cool 6-8% lesser than what you are paying for a credit card. I know what your next question is going to be. How do I qualify to get a personal loan if I have a huge credit card payout? You do not “get” a personal loan here. Your credit card payout gets converted into a personal loan-like product where you pay less interest on the amount but the period you pay it for increases. We all know that personal loans have a fixed duration attached to them while credit card payouts depend on the amount. What banks do in this case is that they calculate your current credit card outstanding and divide it into equal installments with an associated time frame so that it looks like a personal loan because you are paying personal-loan like interest on them. As sated earlier, most of the credit card issuing banks have to provide this option because of certain guidelines by the controlling authority, in this case RBI, but they prefer not to because of offsetting interest payments they get on credit card payouts. As an informed consumer though, you have all the rights to ask your bank to convert your credit card payout into a personal loan product so that you can heave a sigh of relief with you getting less dearer than you used to with credit card payments. Properties and Loans works with debt restructuring in Indian financial asset management markets. To avail a home loan in Delhi or a personal loan in Bangalore, get in touch with us at +91-9899900664 and we will get you the best loan options available in the stratosphere.
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