Can a Personal Loan Help You Manage Debt?

Loans and credit cards can help manage expenses by converting costs into installments. However, excessive credit can strain finances and complicate repayment. In such cases, debt consolidation offers a straightforward way to manage debt effectively. With an online Personal Loan app, you can consolidate your debts into a single loan and keep better track of your EMIs. 

Let’s discuss how a Personal Loan can help manage debt.

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The Concept of Debt Consolidation

If you feel stressed by managing more than one debt at a time, a Personal Loan for debt consolidation can help. Rather than remembering and repaying various installments each month, you can consolidate them into a single loan. It makes the terms and repayment more manageable for you. If you find a Personal Loan with a lower interest rate than your current loans, you can save money while repaying your loans. Moreover, you can revise your repayment structure to make the EMIs more affordable. Instead of paying numerous lenders with various amounts and interest rates, you handle one loan EMI at a fixed interest rate.

Reasons for Debt Consolidation

When you consolidate your debt, you can enjoy the following benefits:

  • Repay Multiple Debts at Once: Handling multiple debts is a significant financial burden that takes up a large portion of your income. With a Personal Loan from a reliable instant loan app, you can repay it all at once. It reduces your financial strain and leaves you with more disposable income.
    • Fixed Interest Rates: If you manage several debts each month, you must pay different interest rates to different lenders. Besides increasing your expenses, it also consumes much time and effort. Consolidating them with a Personal Loan gives you a fixed interest rate throughout the tenure.
  • Handling Only One Loan: Managing multiple debts can be mentally challenging. You have to keep track of various monthly repayments with varying terms and rates. A Personal Loan for debt consolidation eases these worries, allowing you to focus on a single loan repayment.
    • Single EMI: Debt consolidation with a Personal Loan streamlines your finances, making financial planning easier. Rather than worrying about multiple monthly payments with varying deadlines, you must remember only one EMI payment. Opt for the auto-debit facility to automatically repay the EMI each month and avoid late payment penalties.
  • Improved Credit Score: With simplified repayment, you can easily pay your EMIs on time, which helps build your credit score. Your credit rating also improves gradually due to a reduced debt-to-income ratio.

Benefits of Debt Consolidation with a Personal Loan 

An online Personal Loan app is the best funding option to address financial needs. Whatever your objective. You can get approved for an instant loan with eligibility conditions and minimal documentation requirements. Here are some benefits of consolidating debt with a Personal Loan:

  • Fixed Interest Rates: Personal Loans have fixed interest rates. So, the interest rate will remain the same whichever tenure you select. However, choosing a longer repayment tenure may increase the number of EMIs and, eventually, the total interest outgo. You don’t need to worry about fluctuating interest rates under changing market conditions. 
    • Competitive Interest Rates: Personal Loan interest rates are typically lower than those of credit cards and many other loan options. Maintain a good credit score and show ample repayment capacity to get the best deal.
  • Easy Documentation: Personal Loans require minimal documentation, including your KYC and proof of income. You don’t need to visit the lender’s office to submit the documents. Upload the soft copies online and complete the loan application process.
  • Easy Repayment: Personal Loans have flexible repayment terms. Leading  loan apps allow you to choose a tenure with EMIs you can easily afford. Use an EMI calculator to choose a repayment tenure with pocket-friendly EMIs.

Planning Debt Consolidation with a Personal Loan 

Follow these steps to consolidate debt with a Personal Loan: 

Evaluate Your Debts: List all your outstanding debts, including loans and credit card balances. Note their monthly EMIs, interest rates, and due dates.

Check Your Eligibility for a Personal Loan for Debt Consolidation: Compare different loan plans to see if you qualify for a Personal Loan from your preferred lender. Eligibility criteria typically include factors such as age, occupation, work experience, and monthly income.

Compare the Loan Offers: Compare the loan amounts, interest rates, and terms for different loan plans. Consider their customer reviews and additional charges to make an informed decision. Check your current lender’s prepayment charges to find the best option.

Gather the Necessary Documents: Prepare the necessary documents to apply for a Personal Loan using your preferred loan app. These typically include your KYC documents and proof of income. 

Steps to Apply for a Personal Loan

Now that you have decided to consolidate your debt with a Personal Loan, follow these steps to apply using a reliable loan app like Hero FinCorp:

  • Install Hero FinCorp’s online Personal Loan app from the Play Store.
  • Choose a loan amount (up to Rs 5 lakh) and preferred EMI.
  • Enter basic details: Name, Income, Loan Purpose, and PAN Card number.
  • Complete the KYC process.
  • Provide your bank account details.
  • Get real-time loan approval.
  • Digitally sign the eMandate and loan agreement.
  • Receive the amount in your account.

 

Remember, the strategy of debt consolidation lets you gain control over your finances. It is not an instant solution to become debt-free, as you must repay the new loan you borrow. Achieving success with debt consolidation depends on your financial management skills. Repay the EMIs promptly to avoid the debt circle and achieve financial objectives. At Hero FinCorp, you can take a Personal Loan of up to Rs 5 Lakh to repay your current loans and manage them better.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader’s discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.