Management of multiple debts can be both challenging and overwhelming. Even more so if you are dealing with high interest loans and credit cards. Personal loans for debt consolidation offer a practical resolution in such cases.
To tackle all such conditions, personal loans for debt consolidation are a perfect option. They enable the consolidation of such debts into a single loan with a possible reduced interest rate and smoother repayment schedule. This also helps in bringing order and clarity.
Here are five smart ways to use personal loans for debt consolidation:
- Streamline repayments: Under this, all the loans are being combined into one loan. That is why you will only need to pay a single amount. This reduces complexities and limits the things to keep in mind, and not various due dates and amounts. This will also help in ensuring that payments are not skipped or missed.
- Lower interest rates: The interest rate offered by personal loans is lower compared to credit cards, and that will reduce your overall interest cost by a huge amount. For instance, personal loan interest rates start from approximately 9.99% per annum, which is typically lower than that of a credit card. Borrowers are advised to check with their respective bank or financial institution about the terms, hidden charges and conditions as these terms are bound to change as per the policies of the bank.
- Flexible repayment period: All the lenders offer flexible repayment periods, and you can choose a period based on your affordability. This flexibility allows you to keep your monthly expenses manageable. This again brings much-needed clarity and flexibility in the repayment process.
- Credit score enhanced: Lump sum settlement of debt and timely payments enhance your credit score in the long run. This is due to the fact that timely payment indicates good financial discipline. It is a clear sign of integrity and sincerity on the part of a borrower to maintain consistency in repayment of the loans accumulated by him or her.
- Less stress: It will put an end to the weight of paying several loans, thus having numerous payments, interest rates, with potential penalties. It will reduce stress and help in bringing clarity with the consolidation of debt. Streamlining of repayments is also a very crucial step to ensure that payments are made in time with the smallest or the highest interest payment made first so as to further make the process easier.
Best lenders to consolidate loans
Debt consolidation loans are offered by several leading financial institutions in India. Bajaj Finserv, Kotak Mahindra Bank, Poonawalla Fincorp, and IDFC FIRST Bank among others offer up to ₹55 lakh loan at varying interest rates.
It is also important to note that the rates, terms, and conditions mentioned in this write-up are bound to change subject to the terms, conditions, and rules of the mentioned banks and financial institutions. You are advised in your own interest to reach out to the official website of your respective financial institution or its customer support team to obtain the latest and the most accurate details about the interest rates, loan duration, etc., associated with the loans offered by them.
Further, though easy to repay, these loans come with complex terms and conditions. You should be careful while looking out for such loans and protect yourself from falling into debt traps, high interest settlements, hidden charges, etc. Sometimes fixed monthly instalments and fluctuating rates also prove troublesome. Close attention to terms and financial prudence, however, are required to make consolidation worthwhile.
Disclaimer: Debt consolidation loans can help, but missed payments harm credit, and high interest may worsen debt. Review your finances and ensure repayment ability before applying.
