How do I consolidate all my debts into one? :  Living in the era of EMIs and credit cards, our debt seems to hit us in every way possible. Car loans, Home Equity loans, mortgages, and other liabilities haunt us every first day of the month. Marking the deadlines and calculating different types of interests can baffle any person who is liable to pay.

But what if there was one simple loan that covered all of your debts and liabilities? This process of managing all your liabilities into one simple loan is known as debt consolidation.

How does it work?

One loan, one installment

This service consolidates all your credit card loans, home equity loans, bills, and other financial liabilities. You can eliminate calculating and paying multiple interest rates and installments by paying just one monthly.

Once your loan is approved, the amount is credited to your account per the requirements. Likewise, you can settle all your debts with that amount and continue to pay interest for the consolidated loan for a fixed tenor. Liabilities or debts not affixed to an asset are viable for consolidation, such as

  • Car loans
  • Personal loans
  • Education loan
  • Credit card dues

Why should I consolidate my liabilities?

  • To avoid missing your installment deadlines due to multiple loans under your name.
  • To achieve lower monthly installments due to lower cumulative interest rates in consolidation programs.

Let’s understand this concept in detail. For example, you’ve taken a car loan with an obligation of 2,00,000 for two years at 12% and a credit card loan of 2,00,000 at 10%. If the collective monthly installments are calculated, the amount goes up to 12000 per month.

Whether you consolidate your loans, your monthly installment for a single loan obligation of 4,00,000 rupees may go as low as 6,000 in some debt consolidation programs.

  • To avoid the menace of several loans and abide by their different terms and conditions.

How to consolidate all my debts into one?

A debtor needs to assess and evaluate different modalities of all his liabilities, loans, and credits. These include

  • Loan Obligation
  • Monthly installments
  • Respective rate of interests
  • Loan tenure

Once you adjudge all these factors, you can apply for debt consolidation accordingly. You may contact different finance reserves and banks for debt consolidation programs. Several institutions also provide online application and loan approval services.

Before applying for the consolidation, one must read all the terms and conditions carefully to avoid any future resentment. It would help if you also considered the risk factors of debt consolidation, such as high-interest rates, a downfall in your credit score, or loss of collateral due to the involvement of more considerable capital.

The steps you need to follow for this one-stop solution are:

1. Provide your personal, financial, and credit-related information to the finance companies or service providers for the KYC standards. These include

  • Identify proof-PAN card, Driving license, passport, etc.
  • Last six months, bank records
  • Salary slip

Once you’re verified, you move ahead in the queue.

  1. Submit all the details and documents of loans you’re seeking consolidation for.
  2. Once the diligence formalities are completed, you can select the loan amount and tenor at your convenience.
  3. Once your loan is approved, the procured amount is credited to your account.

Hence you can clear all your debts and continue with the loan cycle of your consolidated debt as per the terms and conditions applied. So, apply for debt consolidation today and say NO to multiple monthly installments.

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