Struggling with Multiple Loans? See How This Family Saved 50% in EMIs

"Every month felt like I was working just to pay EMIs — I knew something had to change."

Neha, a 29-year-old teacher from Delhi, lives with her husband and young daughter. Neha had availed herself of three loans:

• ₹7,00,000 personal loan;
• ₹4,00,000 car loan;
• ₹1,00,000 credit card debt

She was making ₹52,000 in EMIs per month, and managing those payments was a job in itself.

Neha thus thought of simplifying the process by combining all her loans and converting them into a single ₹12,00,000 consolidated loan at a reduced rate of interest.

Her EMI dropped to ₹23,000—almost half of what it was before—saving her ₹23,000 every month.

Now, let’s examine how loan consolidation works and why it might be the solution you’ve been looking for.

Debt Ka Jugaad: How Consolidation Changed the Game

Neha had three loans to manage — one personal loan of ₹7,00,000, one car loan of ₹4,00,000, and a credit card balance of ₹1,00,000. Her overall monthly EMIs were ₹52,000, and it was getting too much to handle.

So, she chose to opt for loan consolidation — combining all her loans into one ₹12,00,000 loan with an 11% interest rate for a 5-year term.

Here's how that changed things for her:

Monthly Savings: ₹26,000

Interest Rates Ka Chakravyuh: Where Most People Get Stuck?

Here’s a harsh truth: Many people end up paying way more on loans because they don’t bother comparing interest rates.

Check this out:

• Credit card debt can go as high as 42% per year. Yikes!
• Personal loans usually have interest rates between 10% and 24%.
• Car loans are a little better, at 9% to 13%.
• Home loans (lucky ones!) come with the lowest rates, somewhere around 8.5% to 9.5%.

For example, let's see how Neha avoided the trap. Before consolidation, she was stuck with some hefty interest rates. Here’s what her situation looked like:

Neha was paying an average of 14% interest across her loans before consolidation. But after she merged everything into one ₹12,00,000 loan at 11%, her rate dropped by 3%!

CIBIL Bhai Ka Ashirwad: How It Helped and What to Avoid

CIBIL score is a three-digit number that tells lenders how reliable you are with credit. It ranges from 300 to 900, and here's what the numbers mean:

For example, Neha’s decision to consolidate her loans didn’t just make her EMIs easier to manage but also gave her CIBIL score a nice boost. From 680, her score jumped to 740 in just 9 months. Here’s why:

• She now had only one EMI to pay instead of multiple ones.
• She never missed a payment — always paid on time.
• Her credit usage went down because she wasn’t adding more debt.

Smart tip: If you consolidate your loans but keep spending too much on credit cards, it’s like trying to get fit while eating gulab jamuns every day. It won’t work!

EMI Se Azadi: Before vs After Debt Consolidation

Managing multiple loans can feel overwhelming, but debt consolidation helped Neha cut her EMIs in half and made her financial life much smoother.

For Neha, it wasn’t just about saving money — it was about the peace of mind she got from managing only one loan.

Now, she has more money left every month, no extra charges, and a better credit score. Plus, she now has room to start investing in a mutual fund SIP!

How to Start Loan Consolidation

Loan consolidation might sound complicated, but it’s just a step-by-step process. 

And guess what? Neha did it the smart way, and it worked wonders!

Here’s what she did:

List Your Debts: Neha made a list of all her debts:

• Personal Loan: ₹7,00,000
• Car Loan: ₹4,00,000
• Credit Card Debt: ₹1,00,000

Check Your CIBIL Score: Neha checked her credit score on official platforms like CIBIL, Experian, Equifax, and CRIF Highmark.

Compare Loan Offers: Neha compared loan offers from different lenders. She looked at rates, tenures, and terms.

Choose a Secured Loan: Since she had a home, Neha went for a top-up home loan, which is a secured loan at a lower interest rate.

Consolidate and Close: Neha consolidated her three loans into one ₹11,00,000 loan at a lower interest rate, saving her ₹26,000 every month!

Conclusion

Neha felt trapped, paying ₹52,000 in EMIs every month. After consolidating her loans, her EMI dropped to ₹26,000. The stress eased, her credit score improved, and she finally had room to save. One smart decision changed everything — from surviving to living.

FAQs

• Will consolidating my loans hurt my CIBIL score?

Slight dip initially, but timely repayments improve your score.

• What types of loans can be consolidated in India?

Personal, credit card, car, education, and top-up home loans.

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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?