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Simplify Your Finances with One EMI
Combine multiple high-interest debts like credit cards and personal loans into a single, manageable loan with a lower interest rate.
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Loan Details
Debt Consolidation Personal Loan Calculator
Calculate your EMI and total interest for a debt consolidation personal loan with flexible repayment options.
Instant Approval
No Hidden Charges
100% Digital Process
Representative Example:
Borrow ₹5,00,000 over 12 months at 9.99% APR. Total repayment: ₹5,27,467.42 with monthly EMIs of ₹43,955.62.
EMI Calculator
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Enter Loan Amount
₹5,00,000
50K50L
9.99
8%30%
1
1Y10Y
Monthly EMI
₹43,955.62
Total Interest
₹27,467.42
What is a Debt Consolidation Loan?
A debt consolidation loan is a personal loan used to pay off multiple smaller debts (like credit cards or other loans). This leaves you with just one single EMI to manage, often at a lower interest rate.
By consolidating, you often extend the repayment tenure to reduce the monthly burden. Tenures typically range from 1 to 5 years, helping you improve cash flow immediately.
Key eligibility factors:
- Healthy Credit Score (700+ to get a low rate)
- Debt-to-Income (DTI) ratio check
- Stable income to support the new EMI
- Clean repayment history on existing loans
Consolidating high-interest credit card dues (36-40% p.a.) into a personal loan (11-15% p.a.) yields the highest savings.
Financial Guide
Debt Consolidation Interest Rates
Consolidation loan rates typically range from 10.50% to 14.00% p.a. This is significantly lower than credit card interest rates (APR), which can be as high as 36-42%.
Strategies for Effective Consolidation
Combining multiple debts into one can save money and reduce stress, but only if done correctly. Follow these guidelines to become debt-free faster:
1
The 'Weighted Average' Rule
Ensure the interest rate of your new consolidation loan is lower than the average interest rate of all your current debts combined. If it's higher, you will lose money.
2
Avoid the 'Double Jeopardy' Trap
Once you pay off your credit cards with the loan, do not use those cards again until the loan is repaid. Racking up new debt while paying off the old one is a financial disaster.
3
Calculate Break-Even Costs
Factor in the processing fee of the new loan and the foreclosure charges of your old loans. Proceed only if the interest savings outweigh these one-time costs.
4
Shorten the Tenure
Don't just lower the EMI; try to keep the tenure as short as possible. Extending a 2-year debt to 5 years might lower the monthly payment but will increase the total interest paid.
5
Check for Balance Transfer Options
Instead of a fresh loan, check if you can transfer your credit card balance to a personal loan or another card with a lower interest rate, often available at 0% interest for a few months.
Debt Consolidation Eligibility
Check eligibility To qualify for a consolidation loan, lenders assess your ability to manage the single new EMI and your intent to become debt-free.
Credit Score: A score of 700+ is crucial to secure an interest rate lower than your current debts.
Debt-to-Income Ratio: Your total EMI obligations (including the new loan) should ideally be less than 50% of your net income.
Repayment History: Must have a clean record with no recent defaults or write-offs on existing credit cards/loans.
Employment Stability: Minimum 2 years of employment history ensures lenders of your repayment capacity.
Minimum Income: Net monthly income of ₹20,000+ (higher thresholds may apply for larger consolidation amounts).
Existing Debt Age: Current loans/cards should ideally have a vintage of at least 6-12 months.
Consolidation Loan Fees and Charges
While the goal is to save money, be aware of the costs involved in switching your debt to a new lender:
| Particulars | Charges |
|---|---|
| Processing Fees | 0.5% to 2% (Often negotiable for balance transfers) |
| Foreclosure Charges | Nil to 4% (Check for zero foreclosure lenders) |
| Balance Transfer Fee | Flat fee or 1% of the transfer amount (varies by bank) |
| Penal Interest | 24% to 30% p.a. on overdue amounts |
| Statement Charges | ₹ 200 - ₹ 500 per request |
Other fees and charges levied by the lenders include documentation charges, verification charges, duplicate statement charges and NOC certificate charges.
Regain Control of Your Finances
Stop juggling multiple credit card bills and high-interest payments. Combine all your debts into one manageable loan with a single, lower monthly EMI.
Advantages of Debt Consolidation
- One single EMI vs multiple due dates
- Lower interest rate than credit cards
- Fixed tenure to become debt-free faster
- Boost your credit score by clearing card utilization
- No collateral or security required
- Simplify your monthly financial planning
Consolidation Loan vs Paying Minimum Due
Many people try to manage debt by paying only the minimum amount due on their credit cards. Here is why switching to a consolidation loan is financially smarter.
| Consolidation Loan | Credit Card (Min. Due) |
|---|---|
| Interest Rate: 10.99% - 15% p.a. | Interest Rate: 36% - 42% p.a. (APR) |
| Timeline: Debt-free in fixed tenure (e.g., 3 yrs) | Timeline: Can take 10+ years to clear debt |
| Impact: Lowers Credit Utilization (Boosts Score) | Impact: Maintains High Utilization (Hurts Score) |
| Payment: One fixed monthly EMI | Payment: Variable amount (often increases) |
| Goal: Eliminates the debt completely | Goal: Only services the interest cost |
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