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How a Personal Loan for Debt Consolidation Helps in Getting out of a Debt Trap

Clix October 4, 2021

 

A debt trap is a situation in which you owe a huge amount of money to different people or institutions. You take more loans to pay off previous loans, and this cycle of taking and paying loans never seems to end. If you notice any of the signs that indicate you are getting into a debt trap, be alert and use a personal loan for debt consolidation to overcome the situation. Let’s find out how a personal loan can help in getting out of a debt trap.

What is Debt Consolidation?

Debt consolidation is a system in which you obtain a new loan to pay off numerous of your smaller loans, bills, or debts. By consolidating your debt, you effectively bring all your debts together into a single combined loan for which you have to pay only one monthly EMI.

If you find yourself in a debt trap and want to consolidate your debts into one, then easy personal loans can help pay off your older loans so that you get one loan to pay off now. You get a new EMI and a new loan term with the personal loan so that you can give a fresh start to your finances. Since most personal loans have lower interest rates than several other loan types, you save money on the interest outgo as well.

Reasons Why You Should Consider Debt Consolidation

Taking a personal loan for debt consolidation can be helpful for a number of reasons.

    • Simplifies Your Finances: Instead of making several debt payments every month, you pay only one personal loan EMI after consolidation.
    • Saves Money with Reduced Interest Rate: When you consolidate your debts, use a lower interest personal loan to pay off your high interest loans. This way, you will save money on the interest outgo.
    • Reduces Monthly Payment: Earlier, you were paying several EMIs every month, each with a high interest rate. However, after consolidating your debt, you have one single EMI with a reduced interest rate. So, you will notice that your monthly burden is reduced to a great extent.
    • Allows Debt Payment Faster: You pay your existing debt with a personal loan for debt consolidation. Besides that, if you keep paying your EMIs on time, you can get rid of your personal loan as well faster. Many lenders offer flexible repayment terms so that you can select your loan term with EMIs you can easily afford. Choose the shortest loan term possible and pay it off quickly.

Four Crucial Steps to Get Out of a Debt Trap

If you find yourself in a debt trap, take these crucial steps to come out:

    1. Stay Away from High-Cost Loans

When you are caught in a debt trap, you may agree to accept any loan offer even if it comes at a high rate. However, this is something you should avoid at any cost. Instead, use your savings, investments, gold, mutual funds, and other financial sources to pay off the debts. You may also take your friends or family’s help to get 0% interest or low interest loans.

    1. Settle Expensive Loans First

When you consider consolidating your existing debts with a personal loan, pay off your highest-interest rate loans first. Some lenders like Clix Capital offer collateral-free loans at competitive interest rates. You can approach them to consolidate your debts and get rid of your high-interest loans quickly.

    1. ​Reduce Expenses

Once you pay off your existing loans and realise where you went wrong, it’s time to make some changes in your lifestyle and spending habits. You may again get into a debt trap if you get back to your usual financial behaviour. Begin by making a budget and identify where you are spending unnecessarily. Cut down your splurging behaviour and reduce expenses to bring your finances on track.

    1. Increase Your Income

If you have some extra time or some members of your family are not working, they may consider taking up a job or work from home, such as online jobs, taking tuitions, fashion designing, and many others. However, don’t let your financial situation reflect on your job performance.

Features and Benefits of Personal Loans

Easy personal loans are unsecured loans that you can consider taking for your debt consolidation. Some of their features and benefits include:

    • Ample Loan Amount: Many lenders provide an ample loan amount to consolidate your high-interest loans so that you can pay them off.
    • Competitive Interest Rates: Many lenders offer personal loans at competitive interest rates due to the increasing popularity of personal loans in India. Find the lowest interest rate loan to consolidate your debts.
    • Flexible Repayment Tenure: Many lenders offer flexible repayment tenure to make EMI payments easier for the borrowers. When you take a personal loan from Clix Capital, you get 12 to 48 months to repay your loan. You can choose your loan term with EMIs according to your budget and repayment capacity.
    • Collateral-Free Nature: You can avail easy personal loans without providing any collateral, security, or guarantor.
    • Instant Loan Approval: Online application, paperless procedure, no collateral involvement, and online documents verification make personal loan approval procedure extremely fast and streamlined. At Clix Capital, you can get your instant personal loan online in as little as 15 minutes*.
    • Hassle-Free Loan Application: Online loan application procedure is straightforward and fast. Just fill out an online application form, and you can get your loan without visiting the lender even once.

If you are considering consolidating your debts with a personal loan, then Clix Capital can be your best source of finance. We offer easy personal loans of up to ₹ 25 lakhs at competitive interest rates. Apply for our personal loan for debt consolidation and quickly get out of the debt trap to get your finances on track.

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You can also reach out to us at hello@clix.capital or call us at 1800 200 9898

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