Finance House Personal Loan Eligibility - Check out the Eligibility Criteria for Finance House Personal Loan in UAE like Minimum Salary, Age, Document Required, Nationality, Salary Transfer & More.
Get personal loan at Lowest Interest Rate
Credit cards are a good source to make expenditures related to shopping, utility purchases, and other requirements, as you can simply make the purchase and pay off credit card bills later. Thus, instead of pondering about the bills currently, you can pay for your expenses and clear the dues later.
However, the last point has to be dealt with carefully. If you don’t pay the bills on time, the credit card issuer will charge a late payment fine with additional interest. To overcome this situation and pay off credit debt at once, a personal loan can come in handy. Personal loans are considered one of the best options to pay off a highly-charging credit card bill.
In this article, we will discuss how you can use personal loans to clear your credit card outstanding debt through a method called debt consolidation. Some other points up for discussion would be how debt consolidation can help to tackle your credit card bill payments that are overdue, its benefits and drawbacks, and more.
The credit card debt consolidation method is a strategy that combines multiple credit card bills under a loan. You can clear all the credit card bills in one go and repay the loan in easy monthly installments in one place.
Personal loans make the debt consolidation method easy and less expensive to pay off your credit card bills. If you have a good AECB credit score, you can qualify for a personal loan with a low-interest rate and save big chunks of money in the long run and pay off your credit card debt faster.
Consolidating your credit card debt is a good choice if the interest on your selected personal loan is lower than the interest charged on your credit card. In this case, your current monthly installments are made manageable as the effective interest rate is reduced - this can reduce the burden of the installments and pay off credit card debts in a short period.
Additionally, multiple financial institutions offer personal loans in the UAE to pay off your credit card bills. All you need to do is look for lenders, compare the interest rates, and check the eligibility criteria to get the best personal loan in UAE to clear your credit card bills.
Let’s take a closer look at the benefits of taking out a personal loan to pay off credit card dues -
Despite all the mentioned benefits, taking out a personal loan to pay outstanding credit card dues can be risky. Listed below are a few cons to consider before opting for a personal loan to settle credit card dues -
Multiple financial institutions in the UAE offer various repayment terms and levy different interest rates. However, there is no set rule to follow to find the best personal loan - the best thing you can do is compare the loan terms and eligibility criteria to find an appropriate one.
Some of the crucial things to consider while opting for a personal loan in the UAE are mentioned below -
With securing a lower interest than that on your credit card being the primary motive here, you should closely examine the interest rate on your personal loan to pay off credit card debt. The lower the interest rate, the better it would be.
Keep in mind that interest rates are not universal. They depend on various factors, with your credit score being one such example. As a general rule, the higher your AECB score, the lower your interest rate will be, and vice-versa.
Repayment terms primarily depend on the lender. Generally, the repayment term ranges from 6 months to 4 years for personal loans in the UAE. If you wish to pay off the debt sooner, consider a lender that offers shorter repayment tenure. On the contrary, if you're going to keep your monthly installments low, consider opting for a lender that provides longer repayment terms.
Note: While a longer repayment tenure can bring down the instalment amount, the total interest on the loan also tends to go on the higher side here.
As mentioned earlier, the various fees associated with personal loans in the UAE are essential when comparing loans. It is recommended to evaluate each lender's fee and assess which ones you are comfortable with in case you are required to pay them.
Loan amount means the amount of money that you borrow from the lending institution. Each lender has different minimum and maximum limits for loan amounts. In determining the maximum loan amount, the financial institution takes into account the debt-to-income ratio, credit history, financial profile, AECB score, and so on.
As the primary aim is to pay off credit card debt in one go, it is advisable to go with a plan that offers a loan amount greater than or equal to the total debt amount.
Selecting a personal loan to pay off credit card debt, while considering the fees, tenure, and loan amount, as well as the sheer number of available plans, can be a cumbersome process. As an applicant, you can easily send your personal loan application via policybazaar.ae to avoid all such difficulties and get the most seamless experience.
You can access the best personal loan options in a single palace and compare them without switching between different sites. Moreover, you can apply for a loan with minimal documentation and without any hassle.
The process of applying for a personal loan in the UAE with us is fairly straightforward. You can visit the official website of Policybazaar UAE, navigate to the 'personal loans in UAE' section, and fill out your details in the lead form. This will move you to our personal loan quotes page, where you can compare the different options and apply for the one as per your requirements.
You can also pay off your credit card debt by making extra payments on your credit card. There are two ways to tackle credit card debt - Debt Snowball Method and Debt Avalanche Method. These credit card debt repayment strategies are followed by a large number of borrowers and financial experts to get rid of their debt.
In the debt snowball method, the borrower would design a plan to completely pay off the smallest debt first while making minimum payments on all other debts. To use the method, follow the given steps:
Borrowers can use a debt snowball calculator to assess the total number of months it will take to pay off all their credit card bills.
The debt avalanche method is suitable for borrowers who want to get rid of the most expensive debt first. In this method, the borrower first pays off the higher interest-rate debt.
Follow these steps to use this method to pay off credit card debt -
As an alternative to a personal loan to pay off credit card dues, you can opt for the facility of balance transfer on your credit card. Balance transfer facilities can help you consolidate what you owe by streamlining monthly credit card bills into one payment.
Simply put, this option moves all or part of the debt from one or more credit cards to another credit card. One of the notable benefits of a balance transfer facility is that it has a lower interest rate than other credit cards.
Some of the benefits of card refinancing are mentioned below -
While personal loans are commonly used to finance your personal requirements, one of the best uses of this financial product is to pay off your credit card debt. A personal loan to pay off credit card debt can offer various benefits like lower interest rates, the convenience of only one source of instalments, clearance of all the debts in one go, and more.
At the same time, it is crucial to remember that these benefits depend significantly on the profile of the borrower in terms of their credit score and more. Moreover, if the loan fees are high, the primary motive of repaying the debts at lower rates can be nullified to a considerable extent.
Thus, before applying for a loan, you should check the various options available in the UAE market to make a well-informed decision. For this, you can visit policybazaar.ae and compare the best personal loans in the UAE.