In today’s time, availing a personal loan has become a matter of a few taps on your device. But this quick and instant access to credit has also made it easy to fall into a debt trap. In situations like these, debt consolidation can be your lifeline.
In debt consolidation, you take a loan to pay off all your ongoing personal loans and debts. When you combine your high interest loans into one, you may be able to save money by paying lower interest rate or processing fee.
If you’re someone who has taken on a lot of debt and is finding it challenging to navigate your way out of it, a debt consolidation loan can help you lighten your financial burden.
Debt Consolidation Loan
A debt consolidation loan is a loan you take to pay off your other debt. When you combine your high-interest loans into one and take a personal loan to repay it, it makes your repayments more manageable. Finding the fastest debt consolidation loan in India? Look no further because with Zype you can apply for a loan up to ₹5 lakhs in 5 minutes! Complete your application and get approval in less than 60 seconds.
But before you take a personal loan for debt consolidation it’s important to understand how it works along with its pros and cons. Keep reading to find that out.
Where Can You Get a Debt Consolidation Loan?
A debt consolidation loan is a loan you take to pay off your other debt. When you combine your high-interest loans into one and take a personal loan to repay it, it makes your repayments more manageable. Finding the fastest debt consolidation loan in India? Look no further because with Zype you can apply for a loan up to ₹5 lakhs in 5 minutes! Complete your application and get approval in less than 60 seconds.Zype is a loan app that offers personal loans starting at just 1.5% monthly interest which can be used in debt consolidation.
How Does A Debt Consolidation Loan Work?
When you choose to free yourself from all your financial obligations through debt consolidation, you can combine all your debts and personal loans.
You can take a personal loan for debt consolidation to pay this EMI, protecting your credit score from any further damage.
Debt consolidation doesn’t reduce your number of debts, it just makes it easier for you to repay your loan.
Usually, you’re offered lower interest rates when consolidating your loans and have to make one fixed payment towards your debt, every month.
Swapping High-cost Debt with Low-cost Debt like a Personal Loan
Swapping high-cost debt such as credit card loans or payday loans, with lower-cost personal loans is a good strategy to manage your finances. Personal loans come with affordable interest rates compared to credit cards, or payday loans. By consolidating high-interest loans into a personal loan will help you reduce your interest burden and simplify the monthly payments. This helps to pay off your debt faster and more efficiently.
Single EMI Payment vs Multiple EMI Payments
When repayment of a loan, you have a choice between single payments or multiple EMI payments. You can either pay off the loan in one lump sum amount and save interest if you have funds available or you can pay in multiple EMIs and spread out the repayment period to make your monthly budget more manageable. It depends on your comfort and how you plan your finances.
Disciplined Payment
Disciplined payment habits help to manage any loan effectively. Consistently making timely payments, and avoiding penalties or late fees helps you from securing a good credit score. Setting up automatic payments, and reminders can help in keeping track of your due dates. This helps you achieve financial stability and reach your goals efficiently.
Importance of Personal Loan for Debt Consolidation
While consolidating your multiple debts can make paying loans easy, choosing the right debt consolidation loan can make that process easier. More than that, it makes your loans more affordable and even protects your credit score in the long run.
There are various lenders available in the market who offer consolidation loans with the best terms of borrowing. Moreover, the emergence of loan apps has taken the accessibility to credit to the next level by offering instant loans online.
Zype is such a loan app that offers personal loans up to ₹5 lakhs starting at just 1.5% monthly interest which can be used in debt consolidation. But that’s not all! Find out below how Zype can offer you a debt consolidation loan while serving the best loan experience.
Features and Benefits of Personal Loans for Debt Consolidation
With an application process that takes less than 5 minutes to complete, a super-fast loan is not all that you get from Zype. Here are some ways in which Zype can give you the best loan experience
No Documentation or Paperwork
Not only can you complete your application in less than 5 minutes on Zype, but you can also complete it without the hassle of uploading any documents. Goodbye, paperwork! Just enter some basic information like your email address, PAN and employment details and apply for a loan in no time.
Instant Approval
With Zype, you can get the fastest debt consolidation loan in India. Because after you have completed your application, you can get approved for a loan in 60 seconds.
Quick Disbursal
Get the money you need directly into your registered bank account within 24 hours post-approval.
Collateral-Free Loans
No need to worry about your assets because Zype personal loans are unsecured loans. This means you don’t have to give any of your assets as security to get access to your loan.
Flexible Repayment Tenure
With EMI options of 3, 6, 9 or 12 EMIs, you can choose a repayment tenure that fits your budget.
Document Required for Debt Consolidation Loan
While it only takes 5 minutes to complete your loan application process on Zype, keeping all the required documents and information handy can make the process quicker. And the best part about applying for a loan on Zype is that you don’t have to upload any documents. This is all you need to complete your application:
Mandatory documents
Your PAN and Aadhaar number while filling out your application and completing KYC. (Physical copy not required)
Real-Time Selfie Verification
When completing your KYC, you have to do a real-time selfie verification to activate your credit limit.
Proof of Income (Optional)
You need to provide your bank statement for the previous 4 months only when you want to apply for a higher credit limit.
Eligibility Criteria for Personal Loan for Debt Consolidation
You need to meet your lender’s eligibility criteria to get approved for a personal loan. And understanding the criteria even before you start applying for a loan can help you avoid too many applications. Here are Zype’s eligibility criteria for a personal loan:
Age
18 years or above
Citizenship
Valid PAN & Aadhaar card
Work experience
Salaried individual
Monthly Salary
Monthly income of at least ₹15,000
Things to Consider While Taking a Debt Consolidation Loan
It’s important to weigh out the pros and cons of taking a consolidation loan before you even begin your application process. Depending on your financial requirements and conditions, here are some important things to consider:
Carefully evaluate your financial situation before you decide to take a personal loan for debt consolidation. It’s important to consider your budget and repayment capacity so that you’re able to pay your EMIs on time.
Calculate your total outstanding amount after consolidation so you have a clear understanding of the loan amount you require.
Make sure you check your credit score before you apply for a debt consolidation loan. A higher credit score can increase your chances of getting a high-value loan at lower interest rates.
Different lenders have different loan offers based on your profile. Make sure you compare offers across various lenders before taking a debt consolidation loan so that you get the best terms of borrowing.
Personal Loan for Debt Consolidation Interest Rate
It’s important to understand all the charges associated with taking a personal loan.
Given below are all the charges you may face when taking a loan from Zype so that you get complete transparency about the terms of borrowing.
| Fees & Charges | Amount Chargeable |
|---|---|
| Interest Rate | Starting at 1.5% (monthly) |
| Loan Processing Charges | Processing fees from 2% to 6% on every loan |
| Penalty on Overdue EMIs | Penal interest and late fees will be charged to your total outstanding loan on a daily basis |
How to Apply for a Personal Loan for Debt Consolidation on Zype?
On Zype, applying for a debt consolidation loan is a matter of a few taps. You can complete your application process in these 6 simple steps:
1) Download the Zype App from PlayStore/AppStore and create your account by completing your Mobile OTP.
2) Complete your application process in less than 5 minutes by entering your basic information like name, email address, PAN, employment details, etc.
3) Based on your application, you can get approved for a personal loan in less than 60 seconds.
4) After you’re approved, you have to complete a real-time selfie verification along with Aadhaar-linked mobile OTP to activate your approved limit.
5) Choose the amount you want to transfer along with the repayment tenure that fits your budget.
6) That’s it! You will receive the loan directly into your registered bank account within 24 hours.
Frequently Asked Questions
In debt consolidation, you take a loan to pay off all your ongoing personal loans and debts. When you combine your high-interest loans into one, you may be able to save money by paying lower interest rates or processing fees. The personal loan that you take to repay this loan is known as a debt consolidation loan.
Different lenders have different eligibility criteria for a debt consolidation loan in India. But these are the common debt consolidation loan eligibility criteria:
– The borrower must be 18 years or above.
– The borrower must have a valid PAN and Aadhaar card.
– The borrower must have a stable source of income.
– The borrower must have a good credit score.
In debt consolidation, you combine all your ongoing personal loans and debts into one larger payment, typically at a lower interest rate or processing fee, and take a new personal loan to pay it off.
Debt consolidation can temporarily reduce your credit score. But if you follow all the good borrowing practices and repay your loan on time, it can help you boost your
On Zype, these are all the charges associated with taking a consolidation loan of up to ₹5 lakhs.
| Fees and Charges | Amount Chargeable |
| Interest Rate | Starting at as low as 1.5% (monthly) |
| Loan Processing Charges | Processing fees from 2% to 6% on every loan |
| Penalty on Overdue EMIs | Penal interest & late fees will be charged to your total outstanding loan on a daily basis |
On Zype, you only need your PAN and Aadhaar number to complete your loan application.
Yes, taking a debt consolidation loan to pay off all your debts will help you free yourself from all financial obligations faster.
All Zype loans are collateral-free loans. This means that you don’t have to provide any asset as security to get access to money.