what is a debt consolidation loan in India
Now let's assume that we have borrowed money for interest from outside, three rupees means 36%, one rupee means 12%. Many people are getting more interest from moneylenders and they are getting confused due to the presence of many EMIs, so the bank has come up with a new loan called debt consolidation loan which means that these debts can be 3, 4 loans, or even 6, 7 loans. Bank gives a big loan to clear all these loans.
Do you understand that with this large amount we can maintain only one EMI for clearing all of these loans.
Many people have so many loans like 6 or 7 loans. Some of the loan is taken from outside moneylenders. Interest of 3 rupees, interest of 2 rupees is taken in this way. Another loan is taken from relatives. Relatives get 1 rupee, two rupees interest. Similarly, personal loan, bike loan, car loan, credit card bills are like this. With so many loans we get confused. We keep forgetting how much to pay for something.
Now EMI of one loan is on 1st date of month, EMI on 4th date of another, and EMI on 10th date of another. So we get very confused, we keep missing the some of EMI every time. If we forget to pay for it, our cibil score keeps going down.
Now assume that there are five loans, five EMIs have to pay. So, if we taken the amount from money lenders, we have to pay interest every month and also have to pay EMIs of banks, they are automatically cut off.
So, if we go to the bank and take only one big loan, if we clear all the small loans with that loan, we will have only one EMI. It will be clear whether it is 10th or 2nd of the month as it is a single loan. So, in this way the bank offers debt consolidation. This is nothing but Personal Loan. So debt consolidation loan can be taken in the same way as personal loan is taken. CIBIL score should be high and also a job for us, the salary should be a bit higher in that job. Only then can we take this loan.
debt consolidation loan eligibility
If we have a salary of 20,000, 25,000 rupees like this, we will get this loan. Also, CIBIL score should be high. Some may ask, I don't have a job, I have a company, I am self-employed, will I get a loan? Yes! you’ll get. But you have to show our balance sheet, the balance sheet of the last 2 years and also the IT returns of the last 2 years. Then we get this loan. So, those who are self-employed and those who have jobs will clear this loan. But some people are doing small business and such people do not get this loan. But such people have this problem i.e. how to get out of many loans. But the solution for them is there are some private banks.
What they do is that they look at our small businesses and they come and take care of them but normal banks like SBI, HDFC, etc do not give loans. It is difficult for small businesses. The HDFC bank does not give this offer HDFC bank debt consolidation loan to small businesses. So, private bank will give. But the interest is very high.
So they will come and check and give us this loan. With that loan, all the small loans can be cleared. Now you can ask, what interest should we pay. So, if we take money from the moneylenders, we will pay the interest of three rupees which means 36% already told but this debt consolidation loan says that we will get 14%, 16%, maximum 20% of interest in loan. Where is the 14%, 16%, where is the 36%. Therefore, we have the potential to save a significant amount of money. If the EMI is only one, it can be paid.
The private banks are for small businesses and the interest is 24% like that. Isn't that better? Outside money lenders are demand three rupees means 36% but in private sector banks it is 24% check it out. If the interest rate is high then don't take it, if the interest rate is low then compare and take it. Only one big EMI is better than different types of EMIs then we will be strong and not think much about it.
For example formers don't even have small businesses. they get very little income. But how they get loans?
Farmers also have similar problems. They ask money from people they know. they are struggling to pay that interest. What can such people do? If they have their own house, then they can mortgage the house, which means they can also take a mortgage loan. In this way, we can clear the loans that we have by taking a mortgage loan by our house. Mortgage Loan is available at 15% and 20% interest.
In this way, instead of taking it from many moneylenders, instead of paying high monthly interest to them, it is enough to take only one loan, i.e. mortgage the house, go to the bank and take this loan, if not 20% or 15% and pay this loan to clear all the other loans. Then pay only one EMI to the bank monthly.