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Debt Consolidation

Debt Consolidation in India

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Easy Debt Consolidation in India

What is Debt consolidation?

Debt consolidation is the process of taking a new single loan to pay off all your existing loans thereby leaving you with just one monthly payment rather than several. The theory is that one payment will be easier to manage. The goal is to lower the interest rate and the monthly payment while paying off your debt more quickly.

Debt consolidation is usually opted for by individuals who are repaying several debts with several banks such as a Student loan, personal loan, credit card bills etc that aren’t tied to an asset (Unsecured). It is very difficult to manage several debts as one might miss out on a repayment dates or fail to manage the loans efficiently by controlling high interest rate as they are trying to cope with overwhelming debt.

Types of Debt Consolidation

Debt Consolidation through Secured Loans – One of the options is to consolidate all your unsecured debt to one secured debt by taking a Mortgage loan, Loan against property, Loan against your car, equity, Gold, Life insurance policy, cash value etc. The advantage of going with secured consolidation is that you will have to pay a lesser rate of interest. Because the loan is secured, it is more affordable and if it is against real estate you might also get tax deductions. Secured loans are advanced easily as they are less risky.

Debt Consolidation through Unsecured Loans – This is a good option if you don’t have or don’t want to pledge your collateral and it is quite common. Many banks offer unsecured debt consolidation with lesser rate of interest than usual but higher than secured loan. Do check with the bank if they can provide you any offers such as low interest rate or no interest rate for first month or if they have any other offers for the company you work for etc. The benefit of unsecured consolidation is that your collateral is not at risk.

Are you considering Debt Consolidation?

If yes, begin the process with debt counselling. There are several agencies which are happy to help you in this situation. They will assess your complete financial situation, your income, current debt burden, other expenses etc and suggest if debt consolidation is a good option for you.

Compare now to check the lowest rates online for your debt consolidation loan

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Basic Eligibility Criteria for Debt Consolidation Loans

  • Age of the applicant should be between 21-60 Years
  • Salaried individual with minimum income of Rs 15,000. Salary bracket would again depend on the city you live in and the company you work for. Eg. If you are in a Metro the salary requirement will be higher than non-metro and again if you are working in a top MNC the salary requirement would be lesser than one working with a startup.
  • Should be staying in the city for at least 1 Year
  • Total work experience should be at least 2 Years
  • You would require basic documentation such as your address proof, identity proof, latest bank statements etc
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How we work?

We have greatly simplified your personal loan search and help you get your personal loan in five simple steps,

Start your Personal loan search by using our simple natural language form. Trust us, it takes only 26 seconds to complete!

Your information is then passed through our proprietary eligibility algorithm to show you the different banks and NBFCs who can lend to you.

After you choose a particular option that seems best to you, we call you and help you with the complete documentation.

The bank/partner will then collect all your documents and start processing your loan

We will notify you when your documents are approved and your loan is ready to be sanctioned

Shruthi Arun
Former Employee, Cashkumar

Will Debt Consolidation hurt your Credit Score (CIBIL)?

There are two ways to look at this, let’s go with the positive first. Availing one fresh loan with consolidation to pay off the rest of your old loans makes it look like you have paid off your old debts. Though the debt consolidation loan appears as a new overhead, the previous loans which this pays off will have a positive impact on your score. But you have to repay the debt consolidation loan before the due dates and keep it consistent to improve your credit score in long run.

The other side of the story is, moving the balances of your credit card into an instalment loan and taking a new consolidation loan may itself cause a slight dip in your credit score. The main reason is you will have a new enquiry and a huge instalment show up on your credit report, even though you will have much lower debt-to-credit ratio on your profile. Sometimes debt consolidation will lead to closure of your old credit cards which will get your credit utilization limit low. It will also show that you are on continuous debt, which will be the case for the next few years until you repay the new consolidated loan. In case of unsecured debt consolidation, you will be on a huge unsecured loan which is considered more risky than secured loan. There are chances that the person who opts for debt consolidation might have missed repayments earlier and this will still stay on the credit report. All these factors impact your credit score and lower it but note that this can be improved by repaying your new loan well before the due-date and repaying it consistently. It is important to concentrate on your overall financial health rather than just the score because if you improve this, the measures will reflect in your score.

Pros of Debt Consolidation

  • It is steady and efficient. You don’t have to calculate and manage EMIs on several debts anymore. You make one single payment every month till you are debt free.
  • Debt consolidation begets you a lower interest rate on your overall loan and has longer tenure which results in smaller monthly payments to ease your burden.
  • It reduces stress and gives you emotional and financial relief. You don’t have to worry about loans anymore other than just monthly repayment and concentrate of other important things in life.
  • Now that you have consolidated debt and repaying the monthly EMIs before the due dates, there won’t be collections calls on multiple debts.
  • As you are making regular payments against your consolidated loan, your credit score, which might have taken a dip due to late payments on your old loans, will start to improve.
  • Working out your monthly budget will become a lot easier when repaying a single EMI. It will save you from accruing additional debt because you miscalculated your monthly EMIs.
  • You can save on service fees, initiation fees, processing fees, insurance charges etc charged by several banks and use that money to pay off your monthly EMIs.

Cons of Debt Consolidation

  • It is not always easy to find a debt consolidation loan. Even this depends on your eligibility, your current situation, amount you need to borrow, your credit history etc.
  • While you are stressed about your current loans, don’t apply for a debt consolidation loan with several banks at the same time. This might hurt your credit score which is already low and could affect your chances of obtaining reasonably priced credit for the next few years.
  • Debt consolidation loans might not be appropriate for everyone - for example, if you are a seasonal worker and your income isn’t consistent throughout the year, you might not want the commitment of regular monthly repayments.
  • Reducing your debt obligation through an affordable repayment plan ends up relieving your emotional and financial stress. This relief might leave you feeling prematurely confident and can increase your spending habits again.
  • You may end up paying more interest as paying off short-term debt over a long period automatically increases the interest bill over the duration.
  • In case of secured debt consolidation, you might put your property or mortgage at risk in the case of a default.

If you opt for debt consolidation, beware that it’s not going to magically clear all your debt. You need to pay your EMIs before the due date and be consistent till you pay off all your debt. The key is to start improving your spending and saving habits. You shouldn’t start taking additional advances just because debt consolidation is giving you a little bit of financial freedom. If you are confident to go ahead with it, many major banks and financial institutions offer you debt consolidation loans with competitive interest rates based on your eligibility. You can also compare the different offers on platforms such as us, with your eligibility because applying without comparing might hurt your credit.

Debt Consolidation Reviews

Cashkumar Debt Consolidation Loan is rated     3.8 / 5.0  by 4 users

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Your reviews motivate us and help us make our service even better

Bhuvan 4.5/5
I had an outstanding in my credit card and also a personal loan with ICICI. A timely suggestion of debt consolidation helped me reduce the high interest that I paid for my credit card. Cashkumar team was very prompt in completing the process.

Chandra 4.5/5
I had 3 loans running at different interest rates. I managed to do a debt consolidation of all loans into ICICI which also helped reduce the interest rate significantly. Thanks CK team for the quick turn around time.

Sudharshan 2.5/5
These guys tell too many bank conditions for clearing all my loans and cards. How can banks have so many different rules. it must be same

Afsa 3.5/5
These guys are ok but could be better. i was asking for a status update on my request but nobody took my call. You should work on sunday too guys


Hi Afsa, Sorry to have missed your call. But we hope we were able to offer a satisfying experience. Thanks!

Cashkumar Team
Debt Consolidation Loan by Cashkumar has been rated    3.8/5.0  by 4 users

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