Availing funds via a preferred source such as a personal loan and credit cards have become a habit. The availability of such financial tools is helping many people cover their urgent needs quickly. However, the ill side of such financial tools is that it can become overwhelming and may lead you in a debt trap and overspending.

In the same context, if you have an ongoing loan and credit card accounts and if you are finding it difficult to manage them, you may be falling in a debt trap. Thus, you can take prior precautions and know warning signs that you are heading for a debt trap.

Another thing is when you are already in debt and managing various higher interest-based EMIs, you can apply for a debt consolidation loan to pay off all. Read on to know more about both!

1. You are availing another loan to pay for your expenses:

There may be times when your overall EMIs may become too taxing on your budget. During such a time, you may be tempted to avail another loan and use the amount to meet your expenses. You should know that a debt trap is near when you will need to repay both loans concurrently and it may become too much to handle.

2. You are maximizing credit card limit very often

One of the healthy practices of using a credit card is not utilizing more than 30% of the limit. It lets the funding agency and credit bureaus to be sure of your financial discipline. If you are relying too much on a credit card and using its entire limit, then you need to know that you are nearing a debt trap. It will not only lead to huge bills but will also leave you broke before the end of the month. Hence, you won’t be able to facilitate any urgent needs later in the month.

3. You only pay minimum balance for credit card bills

Most of the credit card companies let you pay just the ‘minimum amount due’ to carry forward the remaining to the next month. It may save you from paying a late or penalty fee, but you will need to pay the interest on the same which may range 20-44%. If you continue to pay only the minimum bill, then a debt trap is near.

Opt For Debt Consolidation Loan And Start Afresh

When you see that you have piled too many EMIs that are eating a considerable portion of your income, then you can avail a debt consolidation loan.

A debt consolidation loan is an extension of personal loan and is designed for the purpose of paying off your existing debts. The loan helps you pay off all existing debts so that you can pay just one EMI instead of many.

As a result, it can assist in saving you as you can repay over a tenor ranging 12-60 months. You can pay small instalments that will help you manage other expenses in life without issues.

A personal loan for debt consolidation can let you borrow as higher as up to Rs.25 lakh from leading banks and non-banking finance companies (NBFCs).

Borrowers with a higher CIBIL score, repayment record, and income consistency can avail affordable personal loan interest rates.

What Are The Benefits of Debt Consolidation Loan?

1. Loans up to Rs.25 lakh

A debt consolidation loan can let you access a large amount up to Rs.25 lakh to repay all debts without taking any other loan.

2. Instant Approval

You can fill the online loan application form and get it approved within a few minutes.

3. Quick Disbursal

After securing the loan approval from a leading lender, you can quick disbursal of the loan amount into your bank account.

4. Minimal Documentation

Most of the lenders come with easy-to-meet eligibility conditions and minimal documentation, making it super easy to avail the loan.

5. Flexible Tenor

The repayment of personal loan for debt consolidation can be made over a flexible tenor ranging between 12 months and 60 months.

6. Online Loan Account Access

Nowadays, lenders let you access loan accounts via their digital customer portals. It means that you can track all loan related information online and 24/7.

If you are battling a debt, then it’s better to opt for debt consolidation loan online and take a fresh start today.

Also Read: 5 Advantages of Using a Personal Loan For Debt Consolidation