Consolidating Debt with a Single Personal Loan: A How-To Guide

Posted on Wednesday, September 25th, 2024 | By IndusInd Bank

Struggling with multiple loans and endless due dates? Curious if there is a simpler way to manage your finances? Debt consolidation could be a perfect solution here. Debt consolidation combines your distinct debt obligations into a single loan, often at a lower rate of interest, making it simpler to manage monthly payments. By just having one due date, you lower the risk of missing payments and incurring late fees.

This approach can also potentially improve your credit score and profile over time, making you a more favourable applicant for future credit applications. While understanding the debt management process might be straightforward, knowing how to implement it practically can be challenging. Here is a stepwise guide to debt consolidation to help you navigate the process.

1) Assess Your Current Debt

Before factoring in a debt consolidation loan, a variant of a personal loan, take stock of all your existing debt. Prepare a list of each loan or credit card debt, along with their respective rates, outstanding dues, and monthly payments.

This holistic overview will provide a clear picture of your overall debt and help you decide if debt consolidation is the correct option. Knowing your overall debt figure, the interest rates you are incurring, and the monthly payments required will guide you in selecting the best personal loan for debt consolidation purposes.

2) Select the Correct Debt Consolidation Loan

Look for personal loans tailored for debt consolidation. Such loans often come with lower rates than credit cards and other unsecured loans. One of the best financial institutions for securing a personal loan for debt consolidation is IndusInd Bank.

IndusInd Bank offers instant personal loans ranging anywhere between ₹30,000 and ₹5 lakh with a repayment tenure of one to four years, which makes it a flexible product for managing your debt. Also, the application process is 100% paperless and available at enticing interest rates.

3) Compute Your New Loan Interest and Terms

Use an online personal loan EMI calculator to estimate your month-on-month payments under the new loan. This online instrument helps you understand how much you require to borrow and the tenure that matches your repayment potential. Input your desired loan proceeds and tenure to view your estimated loan Equated Monthly Instalment (EMI). Ensure the new loan’s EMI is affordable and, as per your budget, to avoid further financial stress.

4) Apply for the Loan

Once you have figured out the best debt consolidation loan for your needs, move ahead with the application procedure. Make sure you have all the required details ready. Financial institutions like IndusInd Bank offer instant personal loans with a paperless process. By keeping your document details handy, you can experience swift and smooth loan processing. The hassle-free process also allows you to receive the proceeds quickly, without unnecessary delays. 

5) Repay Your Prevailing Debts

On receiving the loan proceeds, use it to pay off all your prevailing loans. Repay each debt is completely cleared to prevent any future complexities. Now, you will just have one monthly payment to manage, simplifying your debt repayment process and helping you remain on track. Note that this consolidation of debt into one manageable EMI will not just make your financial planning simpler, but also help you avoid missing any payments.

Also Read: Using Personal Loans for Repaying Your Existing Loans

Ending Note

Debt consolidation via a personal loan can considerably ease your financial stress by merging multiple payments into one manageable monthly instalment. This approach not only simplifies your debt management but also saves money on interest in the long run.

The steps for consolidating debt properly involve – evaluating existing loans, selecting the correct debt consolidation loan, computing new EMI and terms using an online calculator, applying for the loan, and repaying your prevailing debt.

A suitable loan that you can choose for debt consolidation is the IndusInd Bank Instant Personal Loan. It has a 100% paperless process, attractive interest rates, flexible repayment tenures, and quick loan proceeds ranging from ₹30,000 to ₹5 lakh.

Ready to take control of your finances? Opt for an IndusInd Bank Personal Loan today and make way for a more organised and stress-free financial future.

Apply now!

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.