Debt consolidation is the process of combining multiple existing debts—such as personal loans, credit card dues, consumer finance EMIs, or other high-interest borrowings—into a single consolidated loan. Instead of managing multiple due dates, interest rates, and EMI amounts, you borrow a lump sum from a new lender to pay off all existing debts, leaving you with one manageable monthly payment.
Managing 3-4 different loans with different due dates creates confusion. Consolidation simplifies this to a single EMI.
High-interest credit card debts (18-35%) can be swapped for a consolidated loan (10.50%-16%), reducing the burden.
Consolidation demonstrates responsible management. Regular single payments can help rehabilitate your CIBIL score.
Lower rates or extended tenure can reduce your monthly EMI outflow, freeing up funds for emergencies.
While technically unlimited, lenders typically approve consolidation for:
| Criteria | Requirement |
|---|---|
| Age | 21 to 60 years (at loan maturity) |
| Citizenship | Indian Resident (1+ year at current address) |
| Minimum Income | Rs. 15,000 - Rs. 25,000 (varies by lender/location) |
| Employment | Salaried (min 6 months exp) or Self-Employed (2 years business) |
| DTI Ratio | Existing EMIs should be less than 50% of gross monthly income |
| Repayment History | No defaults in past 12-24 months; 6-12 months vintage on existing loans |
Your CIBIL score is the most critical factor for approval and interest rates:
| Credit Score | Status | Interest Rate Range |
|---|---|---|
| 750+ | Highly Approved | 10.50% - 13% |
| 700 - 749 | Approved | 12% - 15% |
| 650 - 699 | Conditional Approval | 15% - 18% |
| 600 - 649 | Limited Approval | 18% - 24% |
| Below 600 | Likely Rejection | N/A |
Consolidation loan rates typically range from 10.50% to 24% p.a.
| Lender Category | Interest Rate Range | Key Features |
|---|---|---|
| Public Sector Banks | 11.45% - 13.50% | Lowest rates; slower approval |
| Private Sector Banks | 10.99% - 18% | Competitive rates; faster service |
| Large NBFCs | 12% - 16% | Quick approval; moderate rates |
| Fintech/Digital | 15% - 24% | Instant approval; premium rates |
| Institution | Max Amount | Rate Range | Tenure | Processing Fee |
|---|---|---|---|---|
| HDFC Bank | Rs. 35 Lakh | 10.99% - 24% | Up to 72mo | 0.5% - 1.5% |
| ICICI Bank | Rs. 25 Lakh | 10.85% - 22% | Up to 72mo | 1% + GST |
| SBI | Rs. 20 Lakh | 11.45% - 20% | Up to 84mo | 0.75% - 1% |
| Bajaj Finserv | Rs. 40 Lakh | 11.45% - 20% | Up to 84mo | 0.5% - 1.5% |
Situation: Rajesh has Rs. 5.5 Lakh debt across 3 credit cards with avg interest of 33% p.a. and minimum payments of Rs. 15,500/month.
Situation: Priya has 4 personal loans totaling Rs. 5 Lakh outstanding. Avg Rate 12.5%. EMI Rs. 25,200.
Outcome: Consolidating at the same rate (12.5%) for longer tenure (4 years) reduces EMI to Rs. 12,750.
Situation: Vikram has a poor score (620). He consolidates debts even at a slightly higher rate (16%) to simplify payments.
Start your journey with us today. Fill out the details below.
Note: All logos and trademarks are the intellectual property of their respective owners.