Simplifying Finances: Debt Consolidation Loan Guide - Loan Trivia


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Friday 12 April 2024

Simplifying Finances: Debt Consolidation Loan Guide

Managing finances can feel overwhelming, especially when dealing with multiple debts from various sources. Debt consolidation loans have emerged as a solution, offering a way to streamline and simplify debt repayment. It helps individuals to take back control over their financial lives. Interested individuals can read further to understand how debt consolidation can help one manage finances more effectively.

How does a debt consolidation loan work?

Here is how debt consolidation works in three simple steps:

  1. Apply for a new loan.

  2. Use the new loan to pay off existing debts.

  3. Repay the newly acquired loan.

What are the benefits of debt consolidation?

Here is a list of benefits borrowers get by opting for debt consolidation in India:

  • Simpler repayment

One can eliminate the hassle of managing multiple EMI payments and tracking each one. A debt consolidation loan allows the consolidation of various EMIs into a single payment, providing better control over finances and simplifying the repayment schedule.

  • Improved credit score

Making regular, on-time payments through a debt consolidation plan can enhance an individual's credit scores. It, in turn, opens up opportunities for better financial products and more favourable interest rates in the future.

  • Lower interest rates

Debt consolidation loan interest rates are typically lower on secured loans such as a loan against property compared to personal loans. Combining all debts into one reduces the EMI payment due to the lower interest rates.

  • Reduced stress

Consolidating debts relieves the mental strain of handling multiple debts, providing peace of mind and a clearer financial outlook for the individual.

How to apply for a debt consolidation loan online?

The application process is streamlined and straightforward, saving applicants both time and manual effort. Follow the provided steps to finalise your application:

Step 1: Go to the loan against property application form and provide the required details.

Step 2: Choose the property location and provide income and annual turnover details.

Step 3: Click on the ‘Submit’ button, to complete the application process.

Upon successful submission of the application form, a representative of the lending institution shall contact the borrower within 24 hours. 

Various financial institutions provide pre-approved offers to existing borrowers on various financial products like loans against property, and home loans, depending on their credibility. These offers speed up the loan application process. Individuals can check their pre-approved offers online by entering their name and contact details on the lender's website.

Choosing a debt consolidation loan is a smart decision for people with many high-interest loans. However, it is beneficial only when an individual's credit score improves, allowing for a lower interest rate.  

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