How Can Instant Personal Loans Help You Avoid Credit Card Debt?

Reported By:| Edited By: |Source: |Updated: Feb 24, 2023, 08:26 PM IST

Credit card debt is a common occurrence. However, carrying a balance on your credit cards can lead to higher interest rates and compounding monthly costs. So, it is wise to take the necessary steps to avoid accumulating credit card debt, otherwise, it can become much more difficult to keep up with your repayments. The longer you wait to take action, the harder it becomes to get out of debt.

Instant personal loans are one of the most popular ways people get out of their credit card debt. Read on to learn more.

What is an Instant Personal Loan?

An instant personal loan is a loan provided by a bank or online lender to an individual for a predetermined amount of time. When you apply for an instant personal loan, you will be approved based on a number of factors, which may include your credit rating, income, and so on. Generally, the amount of the loan will vary, depending on your individual needs and the lender’s risk assessment.

You can apply for such personal loans online. The entire application and approval process is conducted online and you receive the cash in a few days.

How Do Personal Loans Help You Avoid Credit Card Debt?

One of the main benefits of personal loans is that they help you avoid accumulating credit card debt. If you use the loan to pay off a large credit card bill, then you will avoid paying interest on it. This is extremely important for people that carry significant credit card debt. Credit card debt is incredibly expensive, and will likely cause you to incur much higher interest rates. Therefore, if you can pay off your credit card debt, you can significantly lower your monthly payment.

However, you must remember that you will still have to make repayments for the instant personal loan. So, you must apply for personal loans online that offer a smaller interest rate compared to your credit card.

Pros of Instant Personal Loans

• Lower Interest Rates: With a personal loan, you are unlikely to get the astronomically high-interest rates associated with credit cards. Typically, you will be charged a fixed interest rate, varying from 10% to 30%.

• Save Money: Instant personal loans have lower interest rates. By using it to pay off your credit card debt, you will pay much less interest and save money overall.

• Quick Cash Disbursal: Instant personal loans are generally available in a very short period of time. If you need to pay off a large debt as quickly as possible, this is the best option since you’ll have the cash in your bank account within days.

• Easier To Get: Most personal loans online are accessible to a majority of the population. They are designed for the underbanked and have lenient eligibility requirements. Thus, they are easier to get compared to traditional loans.

Cons of Instant Personal Loans

• Additional Fees: There may be fees associated with applying for an instant personal loan. Some lenders charge application fees, late fees, or prepayment fees. Be sure to read the fine print to ensure that taking this loan is financially feasible.

• Timely Payments: You need to pay your loan instalments on time. Late penalties can drive your debt up and you will be back where you started.

• Shorter Repayment Times: Instant personal loans might have shorter repayment times. So, you must be able to pay back the loan within that time.

The Bottom Line

Instant personal loans are an excellent way to get out of credit card debt, particularly if you have a high-interest credit card bill. They help you get out of debt in the short run and save money in the long run. The 100% online application process and fast turnaround time is an added benefit.

Just like with any type of loan, it’s important to do your research before taking out a personal loan so you know what you’re getting into. Do your due diligence and only borrow from recognized, trustworthy lenders. Good luck!

(Above mentioned article is consumer connect initiative. This article is a paid publication and does not have journalistic/editorial involvement of IDPL, and IDPL claims no responsibility whatsoever)