It is important to have good financial health, especially during the beginning of the financial journey. The negative remark on the credit score affects the loan taking capacity of the borrower. However, there are plenty of ways by which the credit report can get red flagged by the CIBIL authority. But the most common method among early-age borrowers is credit card debt.
You should know that credit card debt is high-interest debt, if left due it can impact negatively on the credit score. There are two popularly known options to pay off credit card due, either apply for a personal loan or transfer the balance to another credit card with updated features. However, if you are struggling to pay personal loan dues as well, it is possible to transfer the balance and start fresh. It is called a personal loan balance transfer. If you have a cheaper alternative, then balance transfer is the best option. Difference between Balance Transfer on a Credit Card vs Personal loan Applicability The loan transfer on a credit can be preferred if the debt amount is comparatively smaller. Because in that case, the loan can be paid back easily and faster. On the other hand, if the debt amount is larger, then you can prefer applying for a personal loan. Cost of Borrowing There is a cost involved in borrowing external funds. The cost of borrowing is subtracted from the disbursement amount. Therefore, you need to know the cost of each financing option. Repayment options The balance transfer on a credit card is a short-term loan, i.e; it has to be paid back within 12-to-18 months. However, the personal loan transfer payment option is flexible as it can be paid back within four years. These differences will help you choose between both financing options. Choose wisely! However, if you want to borrow funds to clear off your dues or cover up emergency expenses. You can visit Bajaj Finserv website and check for pre-approved loan offers by just putting in your contact details.
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |