Save on EMIs by consolidating your existing loan

The repayment of multiple loans can become a hassle due to there being multiple payment dates and varying rates of interest. In addition to this, paying off multiple personal loans EMIs can also extinguish a lot of your monthly income. There is a way to streamline this process and reduce your overall cost: consolidating your existing loans. How can one do so?

How to consolidate existing loans?

When one considers personal loan eligibility to take out a new loan to pay off pre-existing EMIs, this is a way to consolidate one’s debt. Hence, all of your varying debts are combined into one loan which will equate to the total loan amount of one’s existing debt. By consolidating all of your debt into one personal loan, you are likely to pay off these obligations at a lower rate of interest while reducing your monthly outgo towards your EMI.

Benefits of consolidating personal loans:

Here are some of the benefits of consolidating your personal loans

• Multiple loans are converted into a single loan.
• You simply have to pay a single EMI.
• Your interest rates can reduce.
• Cumulatively, you save a lot of money.
• Overall, you can improve your credit score through this process.
• Reduces your financial burden and subsequent stress levels.
• Repaying your debt becomes a faster process than it was initially.
• You can hone your focus into accomplishing other financial goals from the amount you save.

Personal loans for debt consolidation

Personal loans can be used for the purpose of debt consolidation. These loans combine your different debts into one simple loan and, hence, you end up paying just one EMI. For the following reasons, personal loans are often considered valuable means of consolidating your loans.

1. One EMI Payment: When it comes to remembering the date and tracking your EMI, this can prove to be quite a hassle. On top of this, missing just one payment can often result in penalty charges that negatively impact your credit score. By consolidating your debt through a personal loan, you can avoid these hassles and allow yourself to make an EMI payment each month.
2. Reduced Rate of Interest: The interest rate that is applied for your personal loan is often lower than the combined rate of interest for any existing loans. Hence, by opting for debt consolidation, you can save money when it comes to the interest component of personal loans. However, make sure you carefully compare the rates of interest that are charged by a variety of lenders and accordingly check your personal loan eligibility.
3. Fixed Repayment Tenure: It is also typical for personal loans to come with varying repayment tenures that range from one year to five years. Hence, if you are in need of repaying a borrowed sum within this period, you have the option to become free of debt in a comparatively shorter amount of time.

Conclusion

Debt consolidation is a surefire way to reduce your gross EMI costs. Before you opt into this, ensure you use the personal loan EMI calculator on Finserv MARKETS to learn the approximate EMI for your new personal loan. Once you assess your EMI costs using the calculator, you can compare the differences between your previous and new EMIs.