Choose credit card, personal loan, debt consolidation loan or balance transfer?
While thinking about borrowing money or managing your debt better, you need to choose the correct debt instrument. The following are the criteria to be considered while choosing the right debt instrument.
- Purpose: New purchase or old debts?
If you want to borrow money to buy something new, you can only consider using credit card or personal loan (using fast cash based on unused balance of your credit card). If your purpose is to reduce interest of your current debt, then what you need is either balance transfer or debt consolidation loan.
- What is it for? How much loan you require?
For balance transfer, it can only be used for credit card debts. If you have more than credit card debts, you should use debt consolidation loan. If you require large amount, you can only consider personal loan or debt consolidation loan. You can use credit card for smaller amount.
- How fast you can repay the loan:
If you just need 14 days before your next cash in to purchase something, perhaps credit card is a good choice as it offers 0% interest, as long as you can pay off the whole amount before next credit card payment due date. If you are buying something more expensive and wish to spread the loan over longer period of time with lesser interest, you shall use fast cash personal loan. This allows you to repay the amount in a longer period.
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