Guide To Using An Instant Personal Loan To Consolidate Debt

Are debts making your life extra complicated? We might have a solution for that!

Since loans have become more common these days, so are debts. Debts can make you feel suffocated since they bring additional stress with them. Debts can come in many forms starting from a credit card bill or a secured or unsecured loan to cover necessary expenses. However, with an instant personal loan, managing those hectic loan payments has now become more accessible than ever!

So, what is a “Debt Consolidation”?

In simple words, debt consolidation is the process that combines all your existing loans into one single loan that can be easily combined with another one. A debt is consolidated with a personal loan that repays all your current debts, and now you have only to repay this one loan.

There are many benefits of debt consolidation, such as:

  • It is quick, easy and hassle-free
  • It combines all of the existing loans into one
  • It helps to repay the loans with higher interest rates faster
  • Debt consolidation offers lower interest rates on some occasions. It’s because the borrower has to only pay for a single loan instead of several loans with different interest rates.
  • With an instant loan, debt consolidation is possible with just a click.
  • There is no need for heavy documentation to apply for an instant personal loan for debt consolidation.
  • It reduces the overall rate of interest for the borrower to pay.
  • It can help to improve your credit score.

Since an instant loan is quick, easy, and hassle-free, people are attracted to it. As per the report by the Economic Times, in December 2021, the value term of the personal loan organisations practically doubled during the festive season 2021. This clearly shows how people are becoming more comfortable with getting a personal loan to consolidate debts.

Know the basics if you are considering a personal loan to know why or not you should consider them:

  • A personal loan is collateral-free
  • The approval time for a personal loan is minimal if all criteria met
  • There is no restriction on an instant loan on End-use, and a borrower can use it for personal use, including debt consolidation.

While the eligibility criteria for collateral-free personal loans can be strict for some financial institutions, some new-age lenders’ instant personal loans require a bare minimum to be eligible.

Steps to Consolidate Debts with An Instant Personal Loan:

You might be wondering where to start. Here is a detailed guide to getting a personal loan to consolidate your debts. By following these simple steps, you can easily consolidate your debts with a personal loan:

Step 1: Estimate your requirements

The first step is to understand your needs. You need to figure out how much total debt you have and how much money you require to cover those expenses. Once you have an estimated amount, you can choose a financial entity that offers instant loans to apply.

Many financial institutions offer personal loans for anyone looking forward to consolidating their debts with minimum eligibility criteria.

Step 2: Credit Score/ CIBIL Score Status Check

After you have figured out what you need, you need to check your credit score. A credit score report is a summary of your financial behaviour in the past. This score ranges between 300 and 900, and it shows if you have repaid your previous loans, instalments, premiums, EMIs, or other financial obligations on time or not. A credit report suggests you have paid your loans on time, and it also helps reduce the interest rate occasionally. A favourable credit score increases your chances of getting a loan quickly.

You can check your credit score for free at the websites of renowned financial institutions. Just fill out the form with your basic data and get your credit report emailed within seconds. So, try now!

Step 3: Check Out Eligibility Criteria

The eligibility criteria might differ in different financial institutions, with many lenders offering detailed information on personal loan eligibility and required documents on their websites.

Check out the list below to see if you are eligible:

  • Age between 25 and 58 years
  • Being a citizen of India
  • Net income on a monthly basis
  • Existing loans
  • The person must have original proof of identity and address

Step 4: Documentation

Although any instant loan requires minimum documentation to be approved, there are still some basic document criteria. These documents must be legitimate, and an applicant must provide copies of identity proofs like Voter ID, Aadhaar, or Passport along with address proof which can either be the same or different. An applicant might also need passport-size photocopies of the borrower. Proof of monthly income needs to be submitted to the lender.

These are the basic documentation required. The address and identity proofs are needed to ensure that the borrower is safe to lend money. Proof of monthly income secures the fact that the borrower will be able to repay the loan within the due dates.

Step 5: Convert the New Loan into Monthly EMIs

It is possible to convert the new personal loan to short monthly EMIs. It eases the burden, reduces the interest rates, and helps to improve the credit score. The new personal loan covers the existing debts and credit card bills on time, and the borrower will only have to pay monthly EMIs for one loan.

With a personal loan calculator on the websites of leading financial institutions, it is easy to calculate your monthly EMI once you have decided on your required amount. It only needs very few details, and a detailed report about your monthly EMI will be there to guide you. Not only does this calculate the EMI, it also provides you with the best offers you can avail of.

So, if you are struggling to keep up with your existing debts, apply for an instant loan in just a few steps. Leading financial institutions like Clix Capital can help you consolidate your debts with a quick and easy instant personal loan within hours!