Debt consolidation is a popular form of loan repayment in India, especially for individuals with multiple loans. Going in for debt consolidation allows borrowers to repay their loans faster and maintain financial discipline. This leads to improvement in their overall credit score over time and increases their eligibility chances for future loans.
With loans being readily available through various mediums in India, there are now several debt consolidation loans available at attractive rates of interest. You can compare and choose the best option that fits your needs.
What is Debt Consolidation?
Debt consolidation refers to consolidating your multiple loans into one single loan. Consolidating your debt gives various benefits to the borrower like low rate of interest, low EMI, longer tenure etc. Especially useful for borrowers who are looking for ways to avoid defaulting on EMIs, make the whole loan payment process simple and more convenient.
Why is Debt Consolidation gaining popularity in India?
Having multiple loans at one time can be taxing for the borrower as they have to follow a timely repayment schedule for all the loans. Otherwise, it affects not only their credit score but also their chances of getting potential loans approved at attractive terms.
Debt consolidation allows borrowers to convert their multiple loans into one single consolidated loan. This makes it easier for them to maintain a regular loan repayment schedule making it easy to pay the monthly instalment. As the interest on such loans is normally low, it helps the borrower to repay the principal amount at the earliest. This allows the borrower to repay their loans faster and get access to new loans.
Which are the Best Debt Consolidation Loans in India?
Given below are the best debt consolidation loans with attractive rates of interest and payment options.
- SBI Xpress Credit Personal Loan
- Amount of loan can be availed up to Rs. 20 lakhs
- The rate of interest ranges from 11.50% – 12% per annum
- Repayment Period – 6 months – 6 years
- Processing Fee – 1% of the amount of loan availed + tax
- Penal Charges – 2% per month
- Prepayment Fee – 3% of the prepaid loan amount
- Borrowers should have an SBI salary account
- The minimum monthly income required is Rs.15,000
- The loan can be applied through any SBI branch or through the YONO app
- No need for security or guarantor and no hidden charges
- Interest calculated via daily reducing balance
- Bajaj Finserv Debt Consolidation Loan
- Amount of loan available up to Rs. 25 lakhs
- The rate of interest applicable is around 12.99% per annum
- The repayment term is between 2 – 5 years
- Minimal documentation required with easy eligibility criteria
- Instant loan approval with credit to your bank account within 24 hours
Though technically not a debt consolidation loan, you can take the following personal loans to repay all your other ongoing loans.
- Citibank Personal Loan
- The loan amount is available for up to Rs. 30 lakhs
- Interest rate starts from 9.99% per annum
- The loan tenure ranges between 2 – 5 years
- Processing Fee – up to 3% of the loan amount
- Prepayment charges – up to 4% of the prepaid loan amount
- Loan available for salaried and self-employed individuals in the age group 21-60 years
- Minimum monthly income required – Rs. 25000
- Minimum documentation with easy loan processing facilities
- Axis Bank Personal Loan
- Loan amount ranging between minimum Rs. 50,000 up to a maximum of Rs. 15 lacs
- Interest rate is applicable in the range between 16% – 24% per annum
- The loan repayment period is between 1 – 5 years
- The minimum age should be 21 years
- Minimal documentation and faster approval process
- ICICI Bank Personal Loan
- The loan can be availed up to Rs. 25 lakhs
- The interest rate is in the range of 10.5% – 19% per annum
- The loan repayment tenure is between 1 – 5 years
- Processing Fee – up to 2.25% of loan amount + tax
- Prepayment charges – 5% on principal outstanding + tax
- Interest on late payment – 24% per annum
- Current bank account holders get instant loan approval
- Minimal documentation
- HDFC Bank Personal Loan
- The loan can be availed up to Rs. 40 lakhs
- The rate of interest rates is between 11.25% – 21.50% per annum
- The loan repayment tenure is up to 7 years
- Processing fee – 2.50% of the loan
- The minimum monthly income required is Rs, 15000
- Easy loan application process through both online and offline mode
- Current customers of HDFC are given instant loan approval
Even if you consider debt consolidation, always ensure that you repay the loan on a timely basis to maintain a good credit score and secure the best terms on future loans. You can check your latest credit score for free on the CreditMantri portal to ensure your eligibility for a debt consolidation loan.