An increasing number of individuals are failing to meet their requirements in today’s fast-paced lifestyle. Higher education, medical treatment, home renovation – everything is becoming expensive. A large number of banks and non-banking financial organisations offer personal loans to those who require financial assistance. Personal loans are borrowed to fund various expenses. The loans can be repaid in easy EMIs and the repayment tenure generally ranges from 12 months-60 months.
Personal loans for debt consolidation
One of the most useful reasons to apply for a personal loan is the ability to consolidate debt. An instant personal loan can be taken for the purpose of debt consolidation to combine outstanding balances into a single amount, which can then be repaid on a monthly basis. By combining all debts and balances into a single amount, it becomes easier for you to pay off the balances without being burdened. You can apply for instant personal loan consolidation smoothly and quickly. Given below are some reasons why you should opt personal loan for debt consolidation.
Single EMI payment
It becomes troublesome for an individual to manage various EMI payments. Failure of repaying EMI will affect your credit score. You may have to pay penalty charges if you miss paying the EMI within the specified due date. By consolidating debts with a personal loan, you can make easy repayments.
Fixed repayment tenure
The repayment tenure for personal loans is generally 1-5 years. Knowing the amount that has to be paid to the lender every month will help you to manage your finances and pay off the loans smoothly.
Security / Collateral
While borrowing a personal loan, you will not be required to submit any security or collateral.
Quick approval and disbursal
Lenders approve the personal loan once they verify your loan application and other documents. The amount of loan that you apply for immediately gets disbursed in your account once your application is approved.
Benefits of availing a personal loan for debt consolidation –
Enlisted below are the benefits of availing a personal loan for debt consolidation.
Flexibility to choose the repayment term
The fundamental benefit of availing a personal loan is that you are allowed to choose the term of repayment as per your ability to repay between 1-5 years. You can choose an EMI amount that would be sufficient to pay off your debts in an easy way.
Facility to make prepayments
During the repayment tenure, you will have the facility to prepay your loan. However, when you pre-pay your loan, the lenders may charge you a nominal fee. The loans can be paid off quickly by making prepayments.
Maintain your credit score
Failure to pay loans on time affects your credit score negatively. Bad credit score will harm your financial records. If your CIBIL score gets affected, it will be difficult for you to avail loans in future. Availing a personal loan for debt consolidation will help you maintain a good credit score if you make timely payments.
The interest charges on a personal loan for debt consolidation is directly correlated to your ability to repay and credit profile. A good credit score is an essential factor that will help you get low-interest rates for a debt consolidation loan. By taking a big loan, you can pay off small debts. One can easily avail a personal loan for debt consolidation if the rate of interest is lower than the rate of interest you are currently paying. However, before applying for a personal loan, compare the rate of interest charged by various lenders.
Taking a long time to repay bills will increase your debt. Your finances can be stabilized by availing a personal loan for debt consolidation and you can easily clear off your debts at once.