High credit card debt is one of the most common financial stress points for salaried professionals.
Multiple cards, high interest rates, revolving balances and late fees can quickly spiral out of control.
One of the most effective ways to regain control is credit card debt consolidation using a personal loan.
This method allows you to replace expensive credit card dues with one single EMI at a lower interest rate, reducing stress and improving your credit score over time.
Here’s how it works.
What Is Debt Consolidation?
Debt consolidation means combining multiple credit card balances into one loan, so you pay:
One lender
One EMI
One fixed interest rate
One due date
This makes repayment easier and cheaper.
Why Use a Personal Loan for Consolidation?
Because credit cards charge 30–42% annual interest, while personal loans generally charge 11–20%, depending on your credit profile.
This means:
✔ Lower interest
✔ Lower EMI
✔ Faster repayment
✔ No late fee traps
✔ Score improvement with timely EMIs
How to Consolidate Credit Card Debt With a Personal Loan (Step-by-Step)
1. Calculate Your Total Credit Card Debt
Add all outstanding amounts, including:
Statement balance
Unbilled balance
Fees and interest
The personal loan amount should cover your full dues.
2. Check Your Eligibility for a Personal Loan
Banks/NBFCs evaluate:
Income
Credit score
FOIR (40% rule)
Job stability
Existing EMIs
A good credit score gives you a lower interest rate.
3. Compare Interest Rates Across Lenders
Choose lenders offering:
Lower interest
Zero/low processing fees
Flexible tenure
Fast disbursal
4. Apply for the Personal Loan Online
Most lenders provide:
Instant approval
Digital KYC
Same-day disbursal
Once approved, the loan amount is credited to your bank account.
5. Pay Off All Credit Card Dues Immediately
After receiving the loan:
Clear each card in full
Avoid using credit cards for a few weeks
Keep screenshots/receipts of payments
This ensures your cards reflect zero balance.
6. Close or Pause Unnecessary Cards
If you have too many cards:
Close unused ones
Keep 1–2 primary cards
Maintain utilisation below 30%
This helps prevent future debt buildup.
7. Repay the Personal Loan on Time
Now you have:
Only one EMI
Fixed tenure
Stable interest rate
Timely payments improve your credit score month-by-month.
Benefits of Consolidating Credit Card Debt
✔ Lower interest
✔ One manageable EMI
✔ Financial discipline
✔ Score improvement
✔ No compounding card interest
✔ Faster debt clearance
Risks to Consider
✘ Taking new debt while old habits continue
✘ Using credit cards again after clearing them
✘ Choosing a high-interest personal loan
✘ Very long tenure leading to higher overall interest
Debt consolidation works only if spending habits are controlled.
Who Should Consider This Strategy?
✔ People with multiple credit cards
✔ High-interest revolving balances
✔ Struggling to manage due dates
✔ Want a lower EMI
✔ Want to improve credit score in 6–12 months
FAQs
Q1. Can a personal loan reduce my credit card interest?
Yes, personal loans have much lower interest rates.
Q2. Will my credit score improve?
Yes — clearing card balances and paying one EMI improves your score.
Q3. Can I consolidate using a balance transfer instead?
Yes, but personal loans work better for large amounts.
Q4. What if I miss EMIs on the personal loan?
Your score will drop again — consistency is key.
Q5. Should I stop using credit cards after consolidation?
Use them carefully. Keep utilisation below 30%.
Published on : 15th November
Published by : SMITA
www.vizzve.com || www.vizzveservices.com
Follow us on social media: Facebook || Linkedin || Instagram
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed