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₹2 lakh credit card dues vs ₹5 lakh personal loan: Which debt should you repay first? Experts explain
Mint 1 hr ago·13 Oct 2026, 1:42 am
When deciding between a ₹2 lakh credit card bill and a ₹5 lakh personal loan, the credit card debt should generally be repaid first. Credit cards carry significantly higher interest rates, often exceeding 40% annually, compared to the much lower rates on personal loans. Paying off the credit card balance immediately prevents the cost of borrowing from ballooning and helps you avoid the cycle of compounding interest.
For investors, this is crucial because high-interest debt can erode wealth faster than most investment returns. By prioritizing the credit card, you free up cash flow for other financial goals. Moving forward, focus on clearing the personal loan once the credit card is settled. Always aim to pay more than the minimum amount due to reduce the total interest paid and protect your credit score.
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