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In today’s day and time, loans are easy to procure. With easy eligibility criteria and minimal documentation requirements, many borrowers take several secured and unsecured loans to manage their finances or buy an asset.
Credit cards add to the additional financial independence for borrowers today. But, over some time, these multiple loans become hard to manage. Varied repayment schedules and the high cost of EMI outgoing make it a burden. It also hampers the credit score and lowers the chances of future debts. Consolidating your existing loans can help borrowers to save on EMIs and also manage their finances in a better way. A debt consolidation loan is a saviour for borrowers struggling with multiple loans.
IT SAVES ONE FROM THE BURDEN OF MULTIPLE EMIs
Several loans mean the borrower is responsible for tracking the monthly deadlines of various EMIs. These EMIs are usually of different amounts and interest rates. It can be taxing and, if not done with the utmost care, may result in penalties or late fees from the lenders. Personal loans for consolidating multiple debts act as a relief as the borrowers only have to manage one easy EMI.
A debt consolidation loan works by consolidating all the high-interest rate loans into a single affordable loan. The borrower can opt for a longer tenure to lower the monthly outgo. It helps considerably in better finance management. The borrower can use the saved money for other financial goals or savings and investments.
Before choosing a personal loan deal, it is advisable to compare different lenders for their offerings in terms of interest rates, loan tenure, loan amount, processing charges, pre-payment charges, pre-closure charges etc. It will help to estimate the total cost of the loan. Prior calculation helps to know whether the consolidation is the right step or not.
Fintechs like LoansJagat offers a comparative platform where the borrowers can compare over 40 key lenders and make an informed decision. The borrowers can apply for a personal loan in Delhi and other cities through their platform. Their portal also allows for the submission of documents. So, the whole loan application process becomes smooth and hassle-free.
IT OFFERS FLEXIBLE REPAYMENT TERMS
Several secured and unsecured loans have strict repayment terms. A debt consolidation loan chosen with the utmost care can help make the repayment simpler. Many lenders have hidden charges which increase the overall cost of the loan. A new lender with a low-interest rate, foreclosure fees and processing charges ensures a lower EMI. One must build a cordial customer-lender relationship to avail better repayment terms.
A debt consolidation loan helps save on the EMIs which would otherwise have gone as interest. It also helps to enhance your credit score. The key to obtaining an affordable loan is to grab a personal loan offer with a low-interest rate. Another important thing is to calculate the cost of closing several loans. Sometimes, lenders charge pre-closure charges that exponentially increase the loan cost. In such cases, it is better to close some high EMI loans and carry on with the smaller loans. Also, a debt consolidation loan is viable if the loan interest rate gets reduced along with the EMI outgo.
The main motto behind a debt consolidation loan is to lower the burden of monthly instalments- its repayment and scheduling so that you can use the saved money to take care of other financial obligations.
A disciplined approach toward the repayment of the loans works to enhance creditworthiness in the long run and opens opportunities for better future debts.
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