Benefits Of Paying Your Credit Card Bill by Availing a Personal Loan
- January 10, 2023
A Brief Overview
This article seeks to shed light on the benefits associated with paying your credit card bill with the aid of a personal loan.
By owning a credit card, you are required to pay each of your bills on time to avoid being lumped with fees associated with not paying on time. Moreover, by missing out on a credit card bill payment, you can witness a sharp decline in your credit score indicative of your lack of creditworthiness.
To avoid the same, consider availing a personal loan online to cover your credit card bill.
What are the Benefits of Paying a Credit Card Bill with a Personal Loan?
By availing of a personal loan, you can pay your credit card bill on time which is a significant relief. There are several benefits associated with this line of funding, the more prominent of which have been mentioned below.
You can potentially earn a lower interest rate.
If your credit card carries forward an outstanding balance, you can potentially end up having to pay an annual percentage rate or APR that amounts to 20 percent or more. In contrast, those with good credit could face an APR of 12 to 17 percent depending on their card.
On the other hand, the interest you would be exposed to with a personal loan would fall below 10 percent. If you have a good credit score, this interest rate may even be lower. This implies that you could reduce your total interest payment in half and may even be able to pay back your dues earlier because your interest will be lower.
Streamline your payments by consolidating them
If you pay several credit card payments each month, keeping track of them may be demanding regarding the dates by which they are due and the owed amounts. By missing a payment, you could incur late payment fees and witness a drop in your credit score.
Personal loans allow you to consolidate each of your credit card payments, thereby leaving you to pay a single monthly fee on your loan rather than several. This can help you free up time and space.
Boost your credit score
Although personal loans imply that your credit is checked thoroughly and can temporarily drop your credit score, all in all, they can positively impact your credit score in several ways.
For starters, by availing of a personal loan, you add diversity to the line of credit extended to you, which can increase your score by 10 percent. This is because it relays to creditors your responsibility with money.
Furthermore, your credit utilization will reduce owing to you having paid more towards your debt. The lower your credit utilization, the better your credit score.
While you might be hesitant about availing of a personal loan, it may be in your best interest to maintain a good credit score and avoid late payment fees. Visit Finserv MARKETS today to learn more about personal loans with low-interest rates.