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Tata Capital > Blog > How a Personal Loan Beats Out a Balance Transfer Card?

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How a Personal Loan Beats Out a Balance Transfer Card?

How a Personal Loan Beats Out a Balance Transfer Card?

If you are struggling to manage your debts, it is time to step back and look for options to ease the burden. And when paying off debts becomes bothersome, personal credit or a balance transfer card can be your saviour.

Personal finance is a multipurpose loan with flexible repayment tenure. On the other hand, a balance transfer personal loan to credit card helps you pay your remaining debt on a credit card with 0% interest for a limited time. Although both products can be good debt repayment options, let’s find out what makes personal finance a better choice.

Competitive interest rates

Various lenders offer personal credit at competitive rates of interest, which allows you to save a considerable amount in the long run. And since it is an unsecured loan, you don’t have to pledge any collateral against it either.

In a personal loan balance transfer credit card, lenders usually charge you 0% interest on repayment. However, this introductory offer is applicable only for a limited time, and the interest rate quickly rises after it ends.

Flexible tenure

Personal debts usually come with a longer repayment tenure of up to 6 years, which can considerably ease your monthly personal loan EMI payments. On the contrary, a balance transfer card offers an introductory interest-free period that lasts up to 18 months or less. Hence, we can say, personal credit allows you a longer and more flexible repayment term.

Additional Read: All You Need to Know About Personal Loan Balance Transfer

No restriction on end usage

Opting for a credit card balance transfer to a personal loan might not be the best move as the latter allows you to do much more than just paying off your debts. For instance, you can easily pay off your medical bills, redesign your bedroom, or enroll your kids in premier institutes with the help of personal finance.

However, a balance transfer card cannot provide this much flexibility as it comes with a credit limit. Also, the amount you can borrow is usually less than a loan, so it becomes inconvenient if you have several debts to take care of.

Credit score

As you know, outstanding debt can be extremely harmful to your credit score and can make it more difficult for you to borrow a loan. This is because a low credit score can lower your personal loan eligibility for the lender. However, once your loan application is approved and you start paying off your installments on time, your credit score can improve significantly. Hence, paying off your personal loan dues on time can be a way to improve your CIBIL score and credit profile in the long run.

Additional Read: How to Apply for a Personal Loan Balance Transfer?

To sum up

While both these financing options can help you handle your debts effortlessly, personal credit has significant advantages over a balance transfer card. It allows you to plan your finances better and provides you with a longer tenure to clear the debt at your pace.

Lastly, if you are looking for a reliable loan provider, Tata Capital offers multipurpose personal credit options at the most affordable personal loan interest rates. To learn more, contact us today!

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