How to Improve Your Financial Situation with a Debt Consolidation Loan?
One of the easiest and effective ways of minimizing the financial stress of repaying your existing loans is debt consolidation. Owing to its convenience, borrowers are usually opting for this option as Indian household debt increased by nearly 2% in the previous financial year.
Combining multiple debts and repaying them as one is supposedly the easiest way to repay. Advances that do not come with any end-user agreement and disburse a significantly large sum, such as a loan against property, are ideal to be used as a debt consolidation loan. These credits offer lower interest rates and longer tenor as well, which makes repayment easier.
Improving your finance with consolidation
Loan Against Property for Debt consolidation helps in improving your financial condition by providing you access to adequate sources of finance. This will, in turn, enable you to pay off your outstanding dues with several lenders at once.
It will improve your credit score, as you will foreclose several lines of credit at once and repay a longer-term, secured debt within a given tenor. Lenders will consider you creditworthy as your repayment history will reflect timely inputs.
Moreover, you will also save a considerable amount of money during repayments as you pay interest on only one line of credit. Secured loans also draw lesser rates than short-term unsecured credits which further alleviates the financial burden.
You are likely to improve your situation in the following ways:
- By availing a loan against property in India, you can avail a larger amount to repay your existing loans. Since you are providing collateral to the financial institution, it assures them of your repayment capability. As a result, the lender can willingly disburse you a larger amount towards your repayment.
- Secondly, if you have a decent credit score of about 750 or above, it will also help your lending institution to get assured that you are a low-risk customer. It will make them sure that you will not default in future.
- The loan against property tenor is usually 20 years for repayment. Though you can opt for a longer tenor, it will reduce your monthly EMIs but increase your overall repayment amount. On the other hand, a shorter tenor will let you do away with the loan faster.
Therefore, it is important to look at the loan against property features before you opt for this loan in order to repay your existing loans by combining them. In addition, also look out for the things to avoid when availing a loan against property.
Eligibility to avail debt consolidation loan
Consolidating several loans such as education loans, credit cards, car loans, etc. can be a feasible option if you are looking to reduce your repayment amount.
Make sure you check for loans against property eligibility before you opt for such a consolidated loan. They usually vary for both salaried and self-employed individuals and require minimum documentation as mentioned below:
- Latest salary slips or bank account statements for the past three months for salaried employees, and 6 months for self-employed employees.
- Identity proof: PAN Card or Aadhaar Card.
- Address proof.
- IT returns.
- Documents of the mortgaged property.
Apart from a loan against property documents required to avail the loan, the eligibility criteria are also important for both salaried individuals. They are:
- Salaried individuals are required to be between 33 and 58 years of age.
- A salaried borrower should hold 3 years’ experience in a private company or an MNC.
- The borrowers should be Indian residents.
Moreover, there are no restrictions on how to use loans against property which makes them highly preferable.
Further on meeting the above-mentioned eligibility criteria; they can receive the loan within just 4 days of submitting the application.
Bajaj Finserv is a reputed NBFC that extends such loans against property to individuals with minimum documentation. They also bring you pre-approved offers to make the application process for loans easier and faster.
These pre-approved offers are also available for other products like personal loans, home loans, business loans, etc. You can check your pre-approved offer by submitting a couple of details that have your name and phone number.
Consolidation makes the whole process of repaying your loan easier as you have to concentrate on only one loan instead of numerous loans at a time. Loan against property for Debt consolidation has been a boon to most borrowers as it minimizes the repayment interest rates to a large extent.