Rishi, a salaried individual from Faridabad, had too many debts under his belt. His credit card dues were growing. He was already repaying the instalments of a home loan. He had bought a car recently and added a car loan to his liabilities. All three loan repayments had different monthly due dates. It had become a common practice for him to forget the due dates and pay a penalty. Besides eating into his finances, these repeated defaults were also hurting his credit score. It was time to do something. He got in touch with his financial consultant. He got to know about a debt consolidation loan. He availed one to solve his loan repayment problems. He now pays only one installment every month.

How did this happen? Through a debt consolidation loan! Find out more about what it is.

Debt Consolidation Loan

A debt consolidation loan is a loan you take to pay off all other loans. With the help of this, the total outstanding balances of all your active loans are repaid in full. The borrower then needs to pay off only the installments for the debt consolidation loan.

Benefits of A Debt Consolidation Loan

We buy something only if it benefits us. A debt consolidation loan too meets this standard. The loan is beneficial because:

  • It unifies the entire loan portfolio of an individual. It saves the borrower from the hassles of servicing multiple loans.
  • The probability of defaults is low. One only needs to track a single due date. The borrower saves money that may otherwise go towards the defaulter’s penalty.
  • The interest rate of debt consolidation loans is lower than for other loans. Thus, the loan brings down the interest payable. This is good for the borrower’s pockets.
  • This loan helps improve a borrower’s credit score. Multiple loans are paid off and the chances of default comes down drastically. So, the borrower gains credit-worthiness.

How to Avail A Debt Consolidation Loan

A debt consolidation loan comes as either a secured loan or an unsecured Personal Loan. Opting for the unsecured Personal Loan is the best alternative.

Why Choose A Personal Loan for Debt Consolidation?

A Personal Loan has many benefits.

  • It is unsecured. A Personal Loan does not demand any collateral. As such, it is favourable for borrowers who do not have collateral. It is also good for those who do not want to pledge their assets as collateral.
  • Easily available. A Personal Loan is instantly approved. Only your credit score and income level have to be good. Lenders need minimal documents. You can avail the funds at the earliest.
  • Can be availed with a bad credit score. Even individuals with a bad credit score can avail a Personal Loan for debt consolidation. No other loan provides this facility. This makes a Personal Loan an ideal solution.

A Last Word

A Personal Loan can act as a debt consolidation loan for most borrowers. The online loan facility is also available. You can check eligibility for Personal Loan and apply online. Rishi availed a Personal Loan and consolidated his debt. What are you waiting for?

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