Pros and Cons of Unsecured Debt Consolidation Loan in India

Pros and Cons of Unsecured Debt Consolidation Loan in India


Nowadays, Most of the people are facing one problem and that is “Credit Card Debts” and the major reason for this debt is “Spending habits and bad money management skills”. This problem is especially among the youth. As to live their lives lavishly, full of parties they end up burdening themselves with debt. Many of my friends are struggling with the same situation and have no one has a clue how to deal with it.


Money is something which is precious to everyone. It takes lots more efforts to earn money rather than losing it.


The way the credit card is portraited is they are rendered most profitable, but we can dig ourselves into debt and stay trapped there forever.

It’s a fact that you can’t borrow a way out of debt but what if there is an easy solution to improve your financial position.

The solution to improving your financial position is Peer to Peer Debt Consolidation Loans with no collateral.

What is Debt Consolidation?

According to Wikipedia “Debt Consolidation is a form of debt financing that entails taking out one loan to pay off many others”.

Unsecured debt consolidations loan can put you in the financial position to make the most out of your incoming money that you have right now.


Now the big question that arises over here in mind is -

Why consolidating the credit card debts is so important?

Credit Cards debts do affect your credit score. A credit score is a numerical expression based on the level analysis of a person’s credit files, to represent the creditworthiness of the person. Whenever you are in need of money and seeking for a loan from banks they won’t cater you if you have a credit score less than 750-800.

Hence if you are not paying off your credit cards debts on time, this would result as an adverse effect on your credit score and your creditworthiness decrease. Hence to improve your financial position it is important to consolidate your debts and consolidating your debt will drive you towards the betterment of your future.

Peer to Peer unsecured debt consolidation loan can help you consolidating all of your high-interest loans into one well thought out debt consolidation loan. It can also help you saving tons of interest that you are being charged month after month. 


Pros and Cons for Unsecured Debt Consolidation –


Pros

Short-term relief

One debt consolidation loan at sufficient interest rate spread over a long period of time would cut off a large amount of money that you are paying off due to credit card debts. As most of you nowadays following a trend i.e. Swipe Karo Ash Karo (pay the minimum credit card amount and live life king size) but you will be ending up paying interest on interest. Unsecured debt consolidation loan will be the fixed interest rate and your principal amount would decrease every time you pay off your EMI.

It’s easier to stay organized

Paying off multiple credit cards debt through cheques or online transfer on a monthly basis with different due dates is way more complicated than paying off only one debt consolidation loan with a single date. Hence it will help you to manage your debt efficiently.

Long-term plan

Debt consolidation loan can help you with your long financial term plans. Instead of paying a large amount for a short span period of time you will be paying off the small amount for the longer period of time. Hence you can manage your income effectively.

No Security

You do not have to give any mortgage or any kind of security to apply for unsecured debt consolidation loans. Hence p2p lending platforms can help you pay off your debts without any mortgage or security in return.

Cons

Big Risks

It depends on your new loan. If you go for secured loan to consolidate your debt financing, collateral with that loan would be at risk if you don’t repay your loan on time whereas with unsecured loan there is no collateral hence there will be no risk to your collateral but it can damage your credit score so you need to take care of the fact that you timely submit your repayments as per scheduled date.

Debt against Debt

You will be fighting debt with debt, if you are having bad spending habits this could lead you to more debt and results in damaging your credit score badly than your credit card debts. Hence you need to change your spending habits and work on your money management skills.


So deal with your debt smartly, Apply for p2p unsecured debt consolidation loan online and save yourself from credit card debts. Apply for an unsecured loan online here.