Should You Repay Credit Card Debt with a Personal Loan or Carry It Forward?
If you're stuck paying high-interest credit card bills month after month, you might be wondering: Should I clear it using a personal loan or continue rolling it over? Let’s break down both strategies and reveal what experts at Vizzve Financials recommend.
💳 Credit Card Debt: The High-Cost Trap
Credit card interest rates in India can go as high as 36–42% per annum. That means a ₹1 lakh balance can balloon into ₹1.4 lakh in a year if only minimum dues are paid.
🏦 Option 1: Repaying with a Personal Loan
A personal loan for debt consolidation typically comes with:
✅ Lower interest rates (10%–16% p.a.)
✅ Fixed EMIs (predictable monthly payments)
✅ No collateral required
✅ Boost in credit score due to reduced credit utilization
Best For: Salaried individuals with a stable income and moderate-to-good credit score.
💼 Option 2: Carrying Credit Card Debt Forward
You continue paying minimum due and hope to clear the rest later. This may offer short-term breathing space but leads to:
❌ Compounding interest and penalties
❌ Negative credit impact
❌ Risk of falling into a debt trap
Worst Case: You pay ₹5,000/month on a ₹1.2 lakh balance — but the interest adds back ₹3,600, and your principal barely shrinks.
📊 Vizzve Financials Insight
According to Vizzve’s Credit Risk Analysis:
“Users who consolidate their credit card debt using a structured personal loan see a 17–24 point credit score boost within 90 days.”
Vizzve now offers a Debt Comparison Tool that:
Calculates savings from loan consolidation
Suggests pre-approved lenders based on your credit report
Helps with one-click application and e-signing
❓ FAQs: Personal Loan vs Credit Card Debt
Q1: When should I consider using a personal loan to repay credit card dues?
When your credit score is above 650 and you have a stable income. You’ll benefit from lower interest and structured repayment.
Q2: Will taking a personal loan hurt my credit score?
Initially, there may be a small dip. But once the credit card balances drop and repayments are timely, your score typically improves.
Q3: What are the risks of carrying credit card debt forward?
You may face penalty interest, and your credit utilization ratio spikes — which directly hurts your creditworthiness.
Q4: How does Vizzve help with credit card debt repayment?
Vizzve compares personal loan offers, calculates your exact interest savings, and even auto-tracks EMIs once you consolidate.
Q5: Can I take a loan for multiple cards at once?
Yes. A single personal loan can be used to clear multiple credit card balances, often referred to as debt consolidation.
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Published by Benny on July 3, 2025.
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed