3 Advantages of Consolidating Debt Using a Personal Loan

Whenever you’re faced with a financial emergency, taking out an instant personal loan is sure to be among the top choices that you would usually consider, in terms of coming up with the required funds. This is primarily due to the convenience they offer, from the reduced TAT and loan disbursal time, to the minimal documentation required. Today, it is very easy to get an instant personal loan, owing to the vast number of banks, NBFCs, and FinTech companies that provide them. Whether you need a personal loan in Bangalore, or a personal loan in Chennai, you can get one in a matter of minutes. 

While it is always a good idea to borrow only how much you require, it may so happen that you end up taking a number of such personal loans in quick succession. In such cases, your financial goals are sure to take a hit, because a lot of debt accumulation has now taken place. While keeping track of numerous EMI payments can be tough, there is an option that can make your life easier – consolidating all your debt using a personal loan. Doing so has many advantages, three of which we have listed out for you:

1. Only One EMI Every Month 
This is the main advantage of consolidating all your debt with a single personal loan. You can structure your EMIS, and in that I mean consolidate the various EMIs you have (due to the number of loans) into a single monthly EMI. You will no longer have to keep track of the many EMI dates every month or worry about missing any of them. Things will become much easier, as you now need to clear only one EMI per month, compared to 3-4 different ones. 

2. Ideal for Consolidating Credit Card Debt
Using a credit card usually comes in handy when you have to make a large payment but do not have ready cash to do so. Even then, it is very easy to get into credit card debt, if you make a number of purchases on the card but fail to pay off your dues on or before the repayment date. This is will also lead to late payment charges and other penalties. In case you want to end this cycle of borrowed credit, you can avail a single Personal Loan instead.

3. You Pay Off Your Debts Faster
As mentioned earlier in the article, the advantages of a personal loan are many. Not only do you combine your multiple debts into a single, larger piece of debt, but you also get benefits like lower interest rates, lower monthly EMIs, or both. The repayment tenure of an instant personal loan ranges anywhere between 1-5 years, which means that you’d end up paying your debt faster.

Wrap Up

The above points serve to illustrate the primary benefits of consolidating multiple debts with a low-cost personal loan. While it is true that personal loans come with a host of benefits, you must exercise caution whenever you borrow, so as to not be saddled with too many loans in the first place.

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