If you’ve been on the lookout for something to help you with your financing needs, you might get confused by the range of debt management products that are available. In particular, a personal loan, a balance transfer and a debt consolidation plan are the three debt management products. These three popular financial products can help you with your financing needs. Moreover, you may be confused about the differences between all of them.
So, let’s take a look at the three debt management products that might help you better based on your financial requirements.
A balance transfer allows you to repay your loans at a promotional interest rate of 0% p.a. However, this rate excludes the loan’s one-time processing fee in the first 3 to 12 months. A balance transfer may be a cost-effective option if you are able to repay your loans in a short period of time. However, if you need to extend your loan repayments for a longer period, you may save on interest charges by opting for a personal loan or a Debt Consolidation Plan (DCP).
Debt Consolidation Plan
Debt consolidation Plan (DCPs) is a third party payment system that can help you make one payment to the credit counseling agency, which distributes the finances to your creditors until it completely paid off. Debt consolidation Plan offers a loan tenure between 1-10 years. These agencies do not make loans, nor do they settle loan debts, they have preset arrangements with a lot of financial institutions, many of which offer lower interest rates and fees, which means more of your payment goes toward the balance rather than finance charges. However, if you just happen to have accounts with creditors that don’t offer any concessions, these benefit gets reduced.
The tenure of personal loans usually ranges between 1 to 5 years. Managing multiple debts can be quite overwhelming. It’s best to take a single loan to consolidate all your debts. You can apply for a personal loan to get rid of the burden and moderate the number of consumer debts. If your credit card bills are piling up, you can clear it all by utilizing personal loans for debt consolidation. Getting a single personal loan for debt consolidation makes it convenient to clear out your monthly payments. A personal loan offers flexibility, which means you can use the loan amount however you want to. It is also a good idea to pay off large expenses. You can also use it to pay off high-interest debts if your personal loan offers a lower interest rate.
Debt Management Tips
With the help of a credit counseling agency, you may find a way to cope with your debt. Their debt management plans can be helpful for you to get back on track but they can also be unnecessary and even damaging when done through an inefficient organization or for all the wrong reasons.
Here are a few debt management tips that can help you manage your debt with ease.
Make a list of all your debts
List down all your debts with the total amount, monthly payment, and due date. Go through all of your debts by doing this you get a clear picture of all the debts you have to pay back. Refer to your bills from time to time and keep updating it once you start to clear all your debts. You can continue doing this till all your debts are paid. Decluttering your debts will keep things organized and keeps you focused on fulfilling your goals.
Ensure timely payment of all your bills
You need to start clearing your bills on time, you can start with small bill payments till all of them are cleared. Moreover, timely repayment can make you more financially disciplined and prevent situations like debt trap. Delayed payments make it harder to pay off your debt since you have to pay a late fee for every payment you miss. Don’t wait until the next due date to send your payment, Instead, make your payment as soon as you have the funds to do so.
Prioritize your debts
You need to decide which debts are on high priority. Paying off credit card debt first is often the best option because credit cards have higher interest rates than other debts. Of all your credit cards, the one with the highest interest rate usually gets priority on repayment because it’s costing a lot of money.
Maintain an emergency fund
Without access to savings, you’d get into debt to cover an emergency expense. Maintaining an emergency fund will cover all such expenses that may come up every once in a while. Eventually, you need to build up a reserve of six months of living expenses. You can start with a small emergency fund to create a bigger fund at some point in time.
Keep a monthly budget plan
A monthly budget will help ensure you have enough money to cover your monthly expenses. Planning in advance can take care of a financial crunch when it’s time to pay your bills. Monthly budgeting can also help you plan to spend any extra money you have left after all your expenses are covered.
Besides all of this if you still need help with your finances you can opt for a personal loan at Finserv MARKETS. Their hassle-free online application process with minimal documentation of loan makes it an ideal choice for getting a loan. Whether it is going for that much-needed vacation, buying a home, starting your own business or pursuing your desire of studying abroad, with the right financial solution, you can now fulfill all of your dreams with ease.
You get flexible loan repayment tenure of up to 12 to 60 months, customers can enjoy the freedom of choosing their own tenure. They also provide you with an EMI calculator that gives you the exact monthly outflow of your EMI amount, this makes your loan repayment much easier. Loans available at Finserv MARKETS come with personalized pre-approved offers, instant approvals, and quick disbursal and attractive interest rates. Finserv MARKETS is a one-stop destination for all the financial needs of an individual and provides a unique digital experience to the customer.
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