What Should You Choose Between Balance Transfer and Personal Loan?

A balance transfer allows the borrower to transfer his credit card debt to another card with a higher limit. It is considered a beneficial option since the interest charged on balance transferred begins with 0%. However, there are certain fees and charges charged in the balance transfer process. Also, to balance transfer the credit card balance, the borrowers need no collateral, and the processing is quick and easy.
A personal loan allows the borrower to borrow funds through a bank or NBFC for a fixed period that cannot exceed five years. Apart, the borrowed amount is lent at an interest rate, which is usually high due to lack of collateral. A personal loan offers end use of the loan amount, allowing it to be used for any purpose. Though the documentation involved in a personal loan is easy, yet the loan can be availed only after one meets the personal loan eligibility criteria.

Also Read: Balance Transfer vs Personal loan: What Should You Opt?

On a concluding note, one must understand that a balance transfer and a personal loan are best suited for different purposes. While a balance transfer is ideal for smaller debts, personal loans are manageable for large debts and for multiple expensed. To make the best out of both, borrowers can even use both of them in combination by using personal loans to manage the balance transfer funds.