How I Paid Off ₹15 Lakh in Debt with a Consolidation Loan – A Real Story

"Ever felt like your debt is just too much to handle? Let me tell you how I went from being buried under ₹15,00,000 in debt to finally getting free."

"How I Paid Off ₹15,00,000 in Debt"

I was stuck with ₹15,00,000 in debt—₹4,00,000 on credit cards, ₹6,00,000 on personal loans, and ₹5,00,000 for my car. Every month, I had to pay ₹55,000, and it felt like I would never catch up.

One day I thought, Okay, that is it. I thought of combining all my loans into one single debt consolidation loan. I borrowed ₹15,00,000 at an 11% interest rate, and the monthly installment was reduced to ₹28,000. It seemed like a lot of relief.

Consolidating my debts helped me take control of my finances. If you're in a similar situation, this might help you too.

But before all of this, I have to remind you where this all started, how things got so out of control, and what my reason was for getting back on track.

Debt Ka Darr: How It All Started

I was earning ₹75,000 a month, but ₹55,000 was going into EMIs. Every month felt like a balancing act—one wrong move, and I’d fall.

I had 3 loans back in 2021:

• Personal Loan: ₹6,00,000 with 13% interest
• Car Loan: ₹5,00,000 with 11% interest
• Credit Card Debt: ₹4,00,000 with 36% interest

This situation stressed me out, and it nearly ruined my life. I recognised that I had to do something about it before it got any worse.

Enter: Debt Consolidation, The Game Changer

Debt consolidation is like a fresh start for your finances. Rather than dealing with several loans, you roll them all into one, often at a lower interest rate. 

It's not magic, but it certainly feels that way!

For example, I had 3 loans, and with three EMIs, it was getting impossible to maintain. I was always in a state of confusion, trying to balance payments. That's when I researched debt consolidation, and it turned out to be exactly what I needed.

Before Consolidation:

After Consolidation

The icing on the cake? One EMI, one rate of interest, and one repayment date. The consolidation made everything simpler to control and easier to manage.

The Big Move: How I Consolidated ₹15,00,000 Smartly

After doing some research (and facing a few rejections), I finally decided to apply for a debt consolidation loan of ₹15,00,000. The bank offered me an interest rate of 11% for a 5-year tenure.

To apply, I had to submit:

• Last 3 salary slips
• Bank statement (last 6 months)
• Loan statements from current lenders
• PAN, Aadhaar, and address proof

Within just 7 working days, my loan was approved, and the bank paid off my loans. I didn't even have to do anything extra.

How Consolidating My Loans Boosted My CIBIL Score

There’s a myth that taking a new loan will hurt your CIBIL score. But it’s the opposite! If you use the loan to pay off high-interest debts, your score can go up.

For example, after I consolidated my loans, my CIBIL score jumped by 65 points — from 676 to 741 in just 3 months.

Here’s a breakdown of what happened:

Mistakes I Made (So You Don’t Have To)

Looking back, here are the mistakes I made — and how they cost me:

Waiting Too Long

I delayed for 1 year, wasting over ₹1,50,000 in interest on my high-interest loans.

Ignoring My CIBIL Score

My score was 676, so I had to clean up my credit usage before I could apply for consolidation.

Not Researching Lenders

I almost signed with a lender offering 14% interest, much higher than the 11% I finally secured.

Smart Tips to Stay Debt-Free After Consolidation

Here are some tips I followed to ensure I stayed on top of my debt after consolidation:

Conclusion

Paying off ₹15,00,000 in debt felt impossible, but consolidating my loans made it much easier. By combining everything into one loan with a lower EMI, I took control of my finances. If you're struggling with debt, this could be the way to get back on track. 

Stay focused and plan wisely, and freedom from debt is possible!

FAQs

• Does a debt consolidation loan hurt your credit score?

No, it can improve your score by lowering credit utilisation.

• What types of loans can be consolidated in India?

Personal loans, credit card debts, car loans, and consumer durable loans can be consolidated.

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About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?