Consolidate Debt with Personal Loan

A debt Consolidation Loan will help you to pay off your old debts & reduce your interest rate. Know how personal loans can consolidate your debts here!

17 Nov,2022 09:47 IST 1731 Views
Consolidate Debt with Personal Loan

When accepting financial obligations such as credit cards or a loan, you must repay them within the tenure specified by the lender. However, with numerous financial obligations, you may feel overwhelmed and default on the repayment. One solution for such a problem lies in taking a personal loan for debt consolidation.

What Are Personal Loans?

Personal loans are specialised credit products offered by lenders such as banks and NBFCs to individuals who want to raise external funds to cover the expenses relating to their personal lives. A personal loan allows individuals to raise immediate capital to pay for various personal expenses, including marriage, education, vacation, home renovation, etc.

There is no restriction on the usage of the personal loan amount. Like other types of loans, lenders charge interest, which the borrowers must repay with the principal amount within the loan tenure.

There are numerous types of personal loans. One such loan product is a personal loan for debt consolidation. However, before applying for this loan type, it is essential to understand the concept of debt consolidation.

What Is Debt Consolidation?

Individuals may have numerous financial obligations, such as credit card bills, loan EMI repayment, etc., which they pay regularly. However, keeping track of your debt becomes hectic and may result in failing to repay a particular financial obligation.

In such a case, individuals default on repayment, significantly lowering their credit score and the chances of getting a new loan. Debt consolidation is taking out a loan from a lender to pay off all the existing liabilities at once. It combines numerous existing debts into one single debt with better repayment terms and interest rates.

When individuals realise their existing debt is rising and may not be in a financial condition to avoid default, they look towards getting a personal loan for debt consolidation. Such a loan allows borrowers to repay their financial liabilities through consolidated monthly EMIs.

Benefits Of Personal Loan For Debt Consolidation

If you have a considerable debt to pay off, you can apply for a personal loan for debt consolidation. The loan can provide you with the following benefits:
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• Quick Approval and Disbursal:

Quality lenders approve the personal loan amount, which you can use for debt consolidation within five minutes of application submission. Once approved, they disburse the loan amount within 24 hours into your bank account.

• Affordable Debt:

Depending on your credit score, you can decrease your EMI by consolidating debts that save you money in the long run. Moreover, you can reduce your monthly payments as they span a longer loan term.

• Lower Financial Obligations:

When you get an online personal loan for debt consolidation, it usually comes with lower interest rates than individual loans. You can make additional monthly payments with the extra money. As a result, you can pay your debt earlier, saving even more money in the long run.

Avail Of An Ideal Debt Consolidation Personal Loan From IIFL Finance

IIFL Finance provides comprehensive and customised personal loans, which you can use to consolidate your debt. You can also use the personal loan calculator to determine your repayment obligations when consolidating your debt into a single loan.

The debt consolidation personal loan offers instant funds up to Rs 5 lakh with a quick disbursal process. You can apply for the loan online or offline by visiting IIFL Finance nearest branch and verifying your KYC details. The loan terms are flexible and come with nominal interest rates to mitigate the chance of a financial burden based on repayment.


Q.1: What are the requirements for a debt consolidation loan from IIFL Finance?
Ans. The requirements for debt consolidation include the following.
• Proof of income – Your lender needs to know that you can afford the loan.
• Credit history – The lender will check your credit report and payment history.
• Financial stability – Lenders want to be sure you can meet your financial obligations.
• Equity – Larger debt consolidation loans often require collateral such as home equity.

Q.2:How much CIBIL score is needed to take a debt consolidation personal loan from IIFL Finance?
Ans: A CIBIL score above 750 out of 900 is ideal for getting a debt consolidation personal loan from IIFL Finance.

Q.3: Do debt consolidation loans hurt your credit?
Ans. Consolidating your debt may help improve your credit score if you make on-time payments or reduce your credit card debt. However, your credit score may fall if you rack up credit card debt again or miss a debt consolidation loan payment.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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