Diwali has ended, but most of us are still hungover from the celebrations. The festival of lights is something the entire country looks forward to, with gifts being exchanged in every house, and people binging on sweets. It perhaps takes a few days for us to truly look back on the festival, with a big belly and empty wallet often reminding us of what exactly transpired.


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If you are one of those who went overboard with gifts, swiping your credit card whenever you found anything interesting, you could well find yourself in trouble when it comes to repaying your bill.


Sure, credit cards are a boon when it comes to giving us financial independence, but they do come with certain limitations. Sticking to the maximum credit limit isn’t the first thing on our minds when we do Diwali shopping, for we typically do not bother about costs when it comes to gifts.


Paying off exorbitant bills can be taxing, especially if we consider the interest rates charged for delayed payments. Taking a personal loan can be a smart option in such cases.


Listed below are a few reasons which make a personal loan an attractive option to clear your credit card dues.


Simple to track - Keeping track of multiple bills and their associated interest rates is hard, with it possible to miss a payment on the due date. A missed payment, under all circumstances, increases the amount which needs to be repaid. One way to minimise the chances of missed payment is to avail a personal loan to clear the bills. All that needs to be done now is pay the EMI for the personal loan at the required time. This simplifies the entire process, reducing the chances of missed payments.


Reduced interest – Most of us repay a credit card bill in EMIs, often paying the minimum amount required. Not paying the entire bill amount results in the balance attracting interest. This interest typically varies, and can be in the range of 15-40% per year (depending on the type of card). This essentially means that you could end up paying more than what you used. With the interest accumulating each month, it would not take long to fall into the Debt Trap. A personal loan, on the other hand, has an interest rate component which typically ranges between 8% and 20%. While this may seem a lot, it can, in all likelihood, reduce the interest by half when compared to credit card dues.


Additional time – The burden of repaying credit card dues can be limited to a few months, essentially draining your resources during this period. In case of a personal loan, one can choose to increase the repayment period, with certain lenders extending this to 60 months. This reduces the monthly financial burden, for the EMI is reduced. While one may end up paying a tad more amount (overall) when the tenure is extended, it does enable one to channel resources and concentrate on other obligations as well.


The festive season is intended to spread cheer and goodwill. While financial burdens can take the spark out of the festivities, choosing smarter alternatives can ensure that the future isn’t buried under debt.


(This is a sponsored content. The article is not the official stand of Zee Media Corporation Ltd, the owner of http://www.zeenews.com.)