The share of credit card users missing payments for over 90 days has increased to 15% in March 2025 from 12.5% in March 2024. This shows that more customers are failing to clear credit card bills on time. You, however, have the option of getting a personal loan to clear credit card bills and protect your credit score.

At a lower interest rate, a personal loan helps you combine all your outstanding debts into a single monthly instalment. In this blog, we will understand how a personal loan will help you pay off your credit card debts, along with the risks and eligibility for obtaining it.

Why Take a Personal Loan for Credit Card Dues?

Not paying credit card bills can soon become costly. Unpaid bills are charged with high interest and late charges, and bill payment defaults hurt your credit score. This reduces your credit limit and restricts future loan approvals. Here is why you must take a personal loan to consolidate credit card debt:

• In India, banks charge as high as 45% interest per annum on unpaid bills. This can quickly increase your debt.
• Credit Card issuers (Banks and NBFCs) charge late fees, which add to the overall dues.
• Any defaulted payment lowers your CIBIL score, which makes it difficult to secure personal loans, home loans, or even new credit cards.
• Credit Card issuers can reduce your credit limit, freeze offers, or reward points when bills are not paid.
• The approvals of loans in the future (personal, auto, or home loans) become tough as the lenders (Banks and NBFCs) consider you a risky borrower.

Benefits of Using a Personal Loan for Credit Card Debt

Here are the key benefits of choosing a personal loan for paying credit card bills:

• Lower Interest Rate: Personal loan interest rates are usually much lower than credit cards. This helps you reduce your overall interest burden.
• Fixed Equated Monthly Instalment (EMIs): You can easily plan the repayment and monthly budget with EMIs, rather than the one-time settlement.
• Debt Consolidation: You can concentrate on repaying a single loan and conveniently pay off all of your credit card debt at once.
• Improved Credit Score: Completely paying off all your credit card balances will help you reduce your credit utilisation, improving your credit score over time.
• Faster Debt Repayment: Compared to revolving credit card balances, where you carry over from one billing cycle to the next, personal loans have set tenures. It increases the chances of paying off your debt sooner.

Eligibility Criteria for a Personal Loan for Card Dues

At DMI Finance, we offer a personal loan of up to ₹5 lakh to help you clear credit card dues. Our unsecured personal loans require no asset or collateral yet offer a digital loan process for your convenience. Here are the personal loan eligibility criteria for a DMI Finance personal loan:

Eligibility Criteria	Details
Age	23 – 52 years
Monthly Income	₹25,000 and above
Employment	Salaried or self-employed
Credit Score	700+

Documents Required

Here are the documents needed to apply for a DMI Finance personal loan:

• Aadhaar & PAN card
• Address proof (utility bills, or rent agreement)
• Proof of Income (salary slips, or bank statement of last 6 to 12 months)

Alternatives to Consider for a Credit Card Loan

You have the following alternatives available to personal loans for paying credit card bills:

• Balance Transfer Credit Card: A balance transfer credit card allows you to transfer the pending bill from one credit card to another credit card that charges 0% or low interest over a specific time (usually 6-24 months).
• Debt Restructuring: Negotiate a structured repayment plan with your credit card provider to make outstanding dues more manageable.

Effectively managing credit card debt requires a strategic approach to prevent the increasing interest, penalties, and long-term financial strain. A credit card loan is one of the best approaches available to you in this situation. The key is to act promptly, as the pending credit card bills not only increase interest but also damage a credit score.

At DMI Finance, we offer collateral-free personal loans to clear credit card bills with ease and regain financial control. Apply for a personal loan with DMI Finance now to pay off your credit card debt and save on interest.

Frequently Asked Questions (FAQs)

1. Can I actually save money by taking out a personal loan instead of paying interest on my existing credit card?

Yes, personal loans typically have interest rates that are far lower than those of credit cards. This helps to lower the overall interest paid and speed up debt repayment.

2. Will taking a personal loan to clear credit card debt impact my credit score immediately?

The hard inquiry can cause a small decrease in your credit score, but over time, timely EMI repayments can improve your credit score.

3. Can I get a personal loan to pay off the debt of just one credit card or multiple cards?

You can use a personal loan to pay off one credit card bill or multiple credit card bills at once.

4. Can I borrow only a certain amount to pay off my credit card debt?

DMI Finance offers a personal loan of up to ₹5 lakh at an interest rate starting from just 14.25%. You can use this amount flexibly to clear credit card debt.

5. How much time will it take to get approved for a personal loan to pay off urgent credit card dues?

With DMI Finance, you can get approval within a few minutes after submitting the loan application and disbursal within 24 to 72 hours.

6. Can I use a personal loan for card dues if I have a low credit score?

You must have a credit score of 700 or higher to be eligible for a personal loan for card dues.

7. Can I combine a personal loan and a balance transfer for maximum savings?

Yes, some borrowers pay off high-interest credit cards with a personal loan before transferring the remaining amounts to a balance transfer card.

8. Can I save on interest by prepaying my personal loan?

Yes, prepayment can lower overall interest expenses. However, you must inquire about any prepayment policies of the lender.

9. Can self-employed individuals obtain a personal loan to pay credit card bills?

Yes, in order to qualify for a DMI Finance personal loan, self-employed applicants should have a monthly income of ₹25,000 and a credit score of 700 and above.

10. Can I avoid late fees and penalties on my credit cards by taking out a personal loan?

Yes, you can avoid late penalties, lower interest rates, and protect your credit score by using a personal loan to pay off credit card debt on time.

Personal Loan for Different Salaries/Incomes
Personal Loan for ₹25,000 Income	Personal Loan for ₹30,000 Income	Personal Loan for ₹40,000 Income	Personal Loan for ₹50,000 Income
Personal Loan for ₹60,000 Income	Personal Loan for ₹70,000 Income	Personal Loan for ₹80,000 Income	Personal Loan for ₹90,000 Income

Personal Loan of Different Amounts
₹50,000 Personal Loan	₹1 lakh Personal Loan	₹2 lakh Personal Loan
₹3 lakh Personal Loan	₹4 lakh Personal Loan	₹5 lakh Personal Loan

Personal Loan in Different States
Personal Loans in Delhi	Personal Loans in Haryana	Personal Loans in Uttar Pradesh
Personal Loans in Himachal Pradesh	Personal Loans in Rajasthan	Personal Loans in Uttarakhand