Should You Repay Your Debt with a Personal Loan in Dubai?

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Personal Loan in UAE

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  • EMI Tenure up to 48 Months
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A personal loan is one of the best features of financial institutions. A personal loan requires no collateral or guarantee as it is deemed as an unsecured loan. Use a personal loan to repay your debt as it is deemed as a good option by experts.

Benefits of Using a Personal Loan to Pay off Debt are

Easy Monthly Installment Repayment

Personal loans are often funded to the customer in a day if approved. The bank requires no explanation of why you want the personal loan as long as you pay it in EMIs. The repayment tenure offered by the bank is generally 48 months. The customer can choose the repayment tenure according to their comfort. The finance amount needs to be paid back in easy monthly instalments.

No Strain on Personal Relationships

There’s no doubt that you can borrow from friends and family in times of need. The only drawback to borrowing from friends and family is the strain that can put on your relationship. Sometimes being unable to repay your debt on time can affect your relationship. Borrowing from friends can become an obligation to pay back with a single installment which is not always possible. A personal loan has no such issue. You can return the personal loan amount in easy monthly installments.

Credit Card Debt Payment with a Personal Loan

If you have somehow incurred credit card debt with high penalties, it would be best to pay it off with a personal loan. Credit card debt has rising interest rates on the unpaid monthly bill. The rising interest rate will keep increasing your debt unless you pay it off in one swipe. That is why the best solution would be to pay it off with a personal loan. A personal loan has a reasonable interest rate per annum. Payback of the personal loan can be done with affordable EMIs.

Manage a High Amount of Debts with a Personal Loan

Paying off the interest in the high amount of debts can strain your monthly budget. A large part of your income can go into paying off the debt. This large amount of debt can ultimately affect your lifestyle. By taking a personal loan you can pay off the huge debt in one swipe. You can then payback the personal loan in reasonable EMIs.

Consolidation of your Debt

It can be quite stressful when you have accumulated a high amount of debt with different parties. Remembering who and how much to repay can be daunting too. Different debts come with different interest rates, making your debt all the more stressful. However, with a personal loan, you can consolidate your debt and pay it off altogether. You will have one interest rate per annum. EMI payment of the personal loan is of great help too.

How to Manage a High Amount of Debt

Credit Cards

There is no doubt that credit cards are a big help to pay for your monthly expenses. With the financial institution's offers of lower monthly interest rates, the sale of credit card is increasing. However, card members don’t realize that the monthly interest rates can also reach 40% when it’s converted to APR is the annual percentage rate.

Paying the minimum amount won’t help decrease your debt, nor will it remain stagnant. With every passing month, your debt will increase. It is advised by experts to pay off your debt altogether. If possible, keep only one credit card to lower your spending and manage your expenses.

Zero-Sum Budgeting

Zero-sum budgeting differs from regular budgeting. Zero-sum budgeting is a process which leaves you with zero money, hence the name. But this is not a bad thing. This process simply assigns every dirham, of your income, a task. Starting from the payback of the loan to monthly expenses. Zero-sum budgeting simply helps manage unnecessary expenses. It can also be seen as a way of splitting your expenses depending on the importance.

Negotiate for Lower Interest Rate

A lot of factors come into play when the rate of interest is being calculated. The financial institutions consider your credit Score, monthly salary, etc. So, you can always try to negotiate with the financial institutions for a better interest rate. The financial institutions are sometimes willing to lower the interest rate if the customer has a good credit history. Lower interest rates will help lessen the burden of your debt.

Final Thoughts

A personal loan can be considered a better option for the repayment of your debts. You can also use personal loan for home renovation. Personal finance not only helps consolidate your debts into one pile and pay it off. It also has the option of easy monthly instalment for the repayment of the loan. You can get a personal loan for low-interest rate. The interest rate per annum is much lower compared to credit card annual percentage rate or monthly interest rates. The repayment tenure of personal finance is quite good too. Usually, the financial institutions offer up to 4 years for the payback of the personal loan.

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