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‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.
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Consolidate Loans & Boost CIBIL Score: The 2025 Smart Loophole
Ritesh had a decent income but a CIBIL score of 663 for months. This is because he had three active loans, high credit card usage, totalling to ₹4,40,000. He also had a couple of missed EMIs worth ₹15,000. To clear off his debts and increase his score, he opted for loan consolidation.
Within 6 months, his score was 727. Let’s see how his loan profile transformation worked with the table below:
Generally, people take a small loan to increase their CIBIL score. Loan consolidation does the same if you are paying its EMI on time. ‘Ek teer se do nishane!’ Let’s see how this shortcut works further in this blog.
Priya had ₹75,000 credit card debt on a ₹1 lakh limit (75% utilisation). She took a ₹75,000 personal loan, cleared the card balance, and dropped utilisation to 0%.
High credit utilisation (over 30%) can negatively impact your scores. Consolidating that debt into a loan immediately lowers your utilisation and can improve your CIBIL score.
Read More – What Happens to Your Credit Score After Debt Consolidation?
For example, Sandeep is a 29-year-old sales rep. He had ₹90,000 credit card dues on a ₹1.2 lakh limit. His utilisation was 75%. So, he took a ₹90,000 personal loan at 12.5% interest for 12 months to clear the card. Here’s how everything worked out just fine:
Aman was a college fresher. Initially, he had no credit score, so, got a credit card, took a small ₹50,000 personal loan and repaid it over six months. He took 3 more small debts over 2-3 years. He got a good credit mix and a credit score of 600. Not Bad!
Credit mix accounts for ~10% of your score. If you add a personal loan to already present debt (like cards), you show yourself as a financially disciplined person. Even secured loans like gold loans have a similar impact.
For example, Megha, a freelance writer, only had a credit card with 3 years of usage. She added a ₹60,000 secured personal loan against her FD and repaid over 9 months. Her CIBIL went from 621 to 683.
‘Kaise?’ Study the table given below.
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Rahul consolidated ₹2.5 lakh debt into a 24-month personal loan. He paid all EMIs on time, and his score rose from 710 to 765 within a year.
Payment history is the single largest factor (~35%) that impacts your CIBIL score. Regular, on-time EMIs from consolidation help build a strong repayment record. Mental health bhi khuch, credit health bhi!’
Also Read - How to Use a Personal Loan to Improve Your Credit Mix
For example, Imran had 4 EMIs, two cards and two loans totalling to ₹2.3 lakh. He took a 2-year personal loan at 11.75% to consolidate. He paid EMIs of ₹11,042 for 12 months on time, and his score jumped from 702 to 755.
‘Ab to samajh jao’ Your score determines your interest rates, which determines your EMIs. Now, there are multiple ways to increase CIBIL score, but debt consolidation is more like a shortcut. By reducing credit usage, building a credit mix, and paying one EMI on time, you rebuild trust with lenders. ‘Samajh gaye?’
