A. Loan consolidation refers to the process of combining multiple debts, such as personal loans and credit cards, into a single loan. This is typically done to simplify payments and potentially reduce interest rates.
A. In consolidation, you take out a new loan to pay off your existing debts, including personal loans and credit card balances. Instead of managing multiple payments and due dates, you make a single monthly payment toward the new loan.
A. From the day of submitting your complete documents to our executive to loan disbursement by bank, it will take around 3 to 7 days.
1. Simplified payments: You only need to manage one loan, making it easier to stay on top of payments.
2. Lower interest rates: Consolidation may help reduce your overall interest costs, especially if you're consolidating high-interest credit card debt.
3. Improved cash flow: By extending the repayment term, you could lower your monthly payments, improving your cash flow.
4. Boost to credit score: Timely payments on your consolidated loan can positively impact your credit score.
A. Initially, applying for a consolidation loan might cause a small dip in your credit score due to the credit inquiry. However, over time, if you make timely payments, consolidation can improve your credit score by reducing credit card utilization and improving your payment history.
A. Loan consolidation is ideal for salaried individuals who:
Have multiple loans and credit card balances.A. Minimum net take home salary is 30k required for debt consolidation.
A. No. Loan consolidation combines your debts into one loan with a new interest rate and payment schedule. Debt settlement involves negotiating with creditors to pay a reduced lump sum to clear your debt, which may negatively affect your credit score. We do not advise to settlement of loans & credit cards.
A. Common debts that can be consolidated include: Personal loans, Credit card balances, Car loan.
A. To qualify for a loan consolidation, lenders typically assess your: Credit score, Income level, Debt-to-income (DTI) ratio, Employment history.
A. Yes, you can still use your credit cards, but it's advised to avoid accumulating new debt. The goal of consolidation is to simplify your financial obligations, so adding new credit card debt could defeat the purpose.
A. Some risks to consider include: Longer repayment terms: While this lowers monthly payments, you may end up paying more in interest over time. Potential for more debt: If you continue to use credit cards after consolidation without addressing spending habits, you could end up deeper in debt. Fees: Some consolidation loans come with origination fees, late fees, or prepayment penalties.