How to Lower Your EMIs Instantly Using Loan Consolidation

In today’s economy, almost everyone has a loan to repay. Some are even struggling with multiple EMIs, finding it challenging to keep up with different due dates and interest rates. Sound familiar?

Remember how we used to keep a single notebook to jot everything down? The practice helped keep things organised, clean, and clutter-free. So why does your financial life look like a spider’s web, with one EMI going in one direction and another pulling somewhere else?

Banks offer Debt Consolidation Loans to save you from being the prey of the spider (debt trap). If you manage multiple loans and often miss due dates, this is for you. ‘Kab Tak Penalties Bharoge?’

A consolidation loan replaces your ongoing credits with a straightforward loan. ‘Aur Suno’, if you have a good credit score, you might get a lower interest rate, reducing your overall burden.

For example, Keshav is a 32-year-old numerologist from Bengaluru. He was stuck paying three loans: a credit card, a car loan, and a personal loan. Nearly ₹30,000 from his income went toward EMIs every month. He had nothing to save or invest after covering essentials like rent and groceries.

But in 2025, he consolidated his loans. Now, his EMI is ₹18,000, allowing him to save money for an emergency fund.

You will be shocked to know that India’s household debt has hit ₹12.5 lakh crore in 2025. Out of it, 43% of people manage multiple EMIs. If you’re one of them, ‘Fikar Not’. This blog will guide you through smart strategies to be debt-free.

How Multiple Loans Affect Your Wallet?

My college roommate Vani had a habit of setting too many alarms. One to wake up, another for meetings, and a bunch more she did not even remember setting. Her phone would buzz all day, and half the time, she would still miss the important ones. 

Wouldn’t it have been easier just to set one well-timed alarm?

Read More – How to Calculate EMI – Formula, Examples & Tools
 

Managing finances feels the same. Today, an average Indian household manages 2.7 loans, from home and car loans to credit card debt.

Loans make dreams possible, but keeping up with multiple payments without penalties and financial stress is a struggle.

Each loan has distinct interest rates, tenures, and charges. Review the table below, and you will know how serious the situation is:

Taking on multiple loans is not the actual problem here. But, doing so without prior financial planning or assistance leads to stress. Let’s discuss some significant drawbacks of taking multiple loans. 

• Higher EMIs – A significant portion of monthly income may go towards paying EMIs, leaving little to no room for savings or emergencies.
  
  

• Debt Trap Risk: Missing or delaying payments can lead to penalties, increased interest rates, and a lower credit score, making it difficult to secure loans in the future.

  
  

• Limited Financial Flexibility: Due to high debt burdens, you cannot spend on items you want or need, which affects your overall quality of life.

That’s why people go for debt consolidation loans. It makes life easier by moving multiple loans into a single EMI. Plus, the interest rate is usually lower than what you were paying before. It cuts down the financial stress, just like setting one well-timed alarm instead of a dozen.

3 Hacks to Reduce Your EMI in 2025

Hack 1: Balance Transfers to Lower Interest Rates

What would you do if you had a credit card debt of ₹1,00,000 with a 36% interest rate per year?

Here’s what I’d do: I’d transfer my due debt from a high-interest lender to one offering a lower interest rate. Smart, right? Well, this is how a balance transfer works. It helps reduce interest costs, making repayments easier and more affordable. 

‘Ye Bhi Suno!’ It works best for credit card debt, personal loans, or high-interest unsecured loans. So, save money and get debt-free faster.

For example, Khush is a 35-year-old teacher from Bengaluru. Two years ago, she took a ₹3,00,000 personal loan at an 18% interest rate to cover medical expenses. She also has a ₹50,000 credit card debt with a 36% interest rate, making her total monthly EMIs overwhelming.

To ease the burden, Khushi opts for a balance transfer. She shifts her debts to a new lender offering a 13% interest rate on a consolidated loan. Let’s see 

how her financial health improved with the table below: 

Hack 2: Extend Tenure Strategically

Agar deadline par aaj tak manager bhi kaam nahi le paya, toh bank ko EMI time se kaise doge?’ Do not panic. We are here to help you.

Suppose you have ₹5,00,000 in total debt at 12% interest. Your EMI will depend on the loan tenure, as depicted in the table:

Will you be able to pay ₹16,607 monthly? It might be difficult for many people to give a significant part of their salary to EMIs. So, we suggest extending the tenure period. It reduces your EMI and makes repayments easier.

‘Poori Baat Suno, ’ the longer the tenure, the more interest you’ll pay. For example, choosing a 5-year tenure brings EMI down to ₹11,122. But you end up paying ₹69,443 more in interest than a 3-year plan. At 7 years, EMI drops further to ₹8,854, but the total interest paid will be ₹2,42,774!

Also Read  - What is EMI? Full Form, Calculation & How It Works for Loans
 

So, the trick is to find the right balance. Choose a tenure that keeps EMI manageable without unnecessarily increasing interest costs. Wise repayment over just paying more.

For Example, Amit is a 35-year-old civil engineer from Hyderabad. He took a ₹7,00,000 home renovation loan at 11% interest for 5 years, paying an EMI of ₹15,215. 

Since he could not save any money, he considered extending the loan to 7 years. This reduced the EMI to ₹12,283 but increased the total interest to ₹2,99,752. 

Instead, he refinanced at 9.5% interest with a 4-year tenure, raising EMI to ₹18,066 but saving ₹1,32,584 in interest. Though he paid more monthly, he became debt-free sooner. 

Hack 3: Convert Unsecured to Secured Debt

What do you consider when you think about managing debt efficiently? Low interest costs, right? From good credit card scores to picking up the lender with the best terms, our goal remains the same, ‘Paisa Bachao!’ 

One effective strategy is to convert unsecured loans (like credit cards and personal loans) into secured loans. Assets such as gold, property, or fixed deposits can help you secure the best deal.

What is Unsecured vs. Secured Debt?

• Unsecured Debt—These are loans that do not require collateral (e.g., credit cards, personal loans). They typically have high interest rates (12-36%) since lenders take on more risk. The eligibility criteria are based on income, credit score, and repayment capacity.

  
  

• Secured Debt – Loans backed by collateral (e.g., gold, property, or fixed deposits) are secured debts. These have lower interest rates (7-12%) because lenders have security against default. The loan amount and terms for approval depend on asset value and the borrower’s financial history.

To save you time, we have created a table with the best-secured loan options and the associated risks.

For example, Ananya is a 29-year-old marketing professional from Pune. She had a personal loan of ₹3,00,000 at an interest rate of 18% and a credit card debt of ₹1,00,000 at 36% interest. Her total monthly EMI was ₹15,000, which was far too much for her to afford.

To reduce her interest burden, she took a gold loan against her jewellery worth ₹4,00,000 at 9% interest and used it to pay off both debts. This cut her EMI to ₹10,500, saving her ₹4,500 monthly.

Conclusion
 

Debt consolidation is not a ‘jugaad’ but a strategic tool to simplify repayments and reduce financial stress. As the saying goes, “Consolidation resets your debt, but discipline keeps it low.” By merging multiple EMIs into one, you lower interest rates and free up cash for savings. Whether through balance transfers or loan restructuring, the key is discipline.

With a clear repayment plan, debt consolidation helps you regain control and move toward financial freedom.
 

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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?