By continuing, you agree to LoansJagat's Credit Report Terms of Use, Terms and Conditions, Privacy Policy, and authorize contact via Call, SMS, Email, or WhatsApp
Disclaimer: The information published on LoansJagat is intended for general informational and educational purposes only and should not be considered financial, legal, or investment advice. Interest rates, loan terms, statistics, and other data may change over time and may vary by lender or source. Please verify the latest information and consult a qualified financial advisor or the respective Bank/NBFC before making any financial decisions.
About the author
LoansJagat Team
Contributor‘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.
Subscribe Now
Related Blog Post
Simplify All Your Loans Into One Affordable EMI
Customers Served
Debt Consolidated
1200+ Reviews
Locations in India
Club all Loans & Credit Card Bills into Single EMI
Quick Apply Loan
Consolidate your debts into one easy EMI.
Takes less than 2 minutes. No paperwork.
10 Lakhs+
Trusted Customers
2000 Cr+
Loans Disbursed
4.7/5
Google Reviews
20+
Banks & NBFCs Offers
Other services mentioned in this article
Based in Mumbai, a 28-year-old marketing executive, Nisha, found herself entrapped in an endless cycle of EMIs. Each month, she battled through:
With three different EMIs eating up her salary, savings ka toh namo-nishaan hi nahi tha. One evening, over chai, her best friend Priya gave her a life-changing tip:
“Debt consolidation kar le, Nishu! Ek loan, ek EMI, kam interest—tension khatam!”
Nisha did her research and took a debt consolidation loan of ₹7,25,000 at just 11% p.a. Instead of teen alag-alag EMIs, she now had just one at a lower interest rate. No more due dates ka jhanjhat, no more extra charges ka jhatka!
By choosing debt consolidation, Nisha finally said, “Bye-bye, EMI ka bawaal; hello, sukoon bhari life!”
A debt consolidation loan is the act of taking out a single loan to pay off multiple debts and liabilities.
It enables the customers to combine all their debt obligations into a new single loan and repay the loan easily and comfortably at a lower interest rate.
Suppose you took loans from five different friends in different amounts.
Now, you have to remember to pay them all back on different days. When payments are delayed, these friends expect additional funds (interest) from you.
Read More – Why Debt Consolidation is a Game Change
Then, your friend Vikram says, "Take ₹45 from me, pay them all, and just return my money in small amounts every month. Plus, I’ll charge you less extra money (interest) than they did."
Now, instead of paying five people, you just have to pay one.
That’s debt consolidation—combining many loans into one simple, cheaper loan.
Government Banks (Public Sector Banks)
Bank | Interest Rates (per annum) | Loan Amount | Tenure | Key Features |
State Bank of India (SBI) |
Private Banks
Bank | Interest Rates (per annum) | Loan Amount | Tenure | Key Features |
HDFC Bank | 10.50% to 21.00% |
Non-Banking Financial Companies (NBFCs)
NBFC | Interest Rates (per annum) | Loan Amount | Tenure | Key Features |
Bajaj Finance Limited | 13.00% onwards |
No collateral is required.
Debt consolidation proves to be a total "paisa vasool" move, as it enables a borrower to manage multiple loans easily while saving money in the long run. Here are the reasons why this makes sense financially:
One EMI, Zero Tension
The merger of several EMIs into one, with a single EMI and favourable interest, instead of juggling multiple EMIs with different interest rates, is not only possible, but it also relieves a burden off your shoulders so that you never miss a payment.
Lower Interest Rate = More Savings
If you are currently paying high interest on your loans (e.g., credit cards, 36%), consolidating them into a lower-rate loan (12% to 15% personal loan) can save you a lot of interest.
Longer Term = Lesser EMI
Consolidation enables you to extend the repayment tenure, which in effect lowers your EMI.
For example:
11.45% to 14.60%
Up to ₹20 lakh |
Up to 6 years |
No processing fees for Xpress Credit Personal Loan. |
Punjab National Bank (PNB) | 12.50% to 14.50% | Up to ₹10 lakh | Up to 5 years | Processing fee up to ₹500. |
Bank of Baroda (BoB) | 11.40% to 18.75% | Up to ₹10 lakh | Up to 5 years | Digital pre-approved loans with quick processing. |
Up to ₹40 lakh
1 to 5 years |
Quick disbursal with minimal documentation. |
ICICI Bank | 10.75% to 19.00% | Up to ₹25 lakh | 1 to 5 years | Pre-approved offers for existing customers. |
Axis Bank | 10.49% to 20.00% | Up to ₹15 lakh | 1 to 5 years | Flexible repayment options. |
Up to ₹25 lakh |
1 to 5 years |
Quick approval and disbursal. |
LIC Housing Finance Limited | 8.65% onwards | Based on property value | Up to 30 years | They exclusively offer home loans while working with easy paperwork. |
Mahindra & Mahindra Financial Services Limited | 12.00% onwards | Varies based on product | Up to 5 years | Focuses on financing in rural and semi-urban areas. |
Aditya Birla Finance Limited | 14.00% onwards | Up to ₹15 lakh | 1 to 5 years |
*T&C Apply
Better Credit Score
Late and missed payments will harm your CIBIL score. By consolidating your debts, you can be assured that effective payments are made, hence enhancing your creditworthiness for loans in the future.
Stress-Free Financial Life
Easy and controlled management by keeping to one loan instead of several loans reduces stress, making it a classy and ‘Paisa Vasool’ decision.
The following steps show you how to qualify for a debt consolidation loan:
Step | What You Need To Do | Key Requirements |
Check Your Credit Score | Review your CIBIL score before applying. | Minimum 650+ (Higher score = Better interest rates) |
Calculate Your Total Debt | Sum up all outstanding loans and credit card dues. | Ensure the new loan covers the full amount. |
Compare Lenders & Loan Options | Research banks, NBFCs, and online lenders for the best interest rates. | Look for 10% to 18% interest rates and minimal processing fees. |
Check Eligibility Criteria | Verify if you meet the lender’s requirements. | Income: ₹20,000–₹30,000/month, Debt-to-Income Ratio: Below 40%-50% |
Gather Required Documents | Collect and submit the necessary paperwork. | ID Proof: Aadhaar/PAN, Income Proof: Salary Slips/ITR, Address Proof: Utility Bill |
Apply & Get Loan Approval | Apply online or at a bank/NBFC branch. | If approved, the loan is disbursed, old debts are paid off, and you start repaying one EMI. |
Debt consolidation helps you manage your EMIs more effectively when you have lots of them. These are the best ways to use debt consolidation effectively in 2025.
Choose the Right Loan Type
Target the Lowest Interest Rate
Keep an Eye on Fees & Charges
Optimise Loan Tenure
Apply the Debt Snowball or Avalanche Method for Debt Payment
Automate EMI Payments
Improve Your Credit Score For Better Deals
Your CIBIL score serves as your financial status—good scores lead to top loan deals. What takes place after you combine multiple debts? Let’s break it down:
Stage | Impact On Credit Score | Why It Happens |
Loan Application (Short-Term Drop) | Slight Decrease | Lenders do a hard inquiry, which can temporarily reduce your score by 5-10 points. |
Old Loan Closure (Neutral/Positive) | Neutral / Positive | Paying off multiple loans reduces overall debt, improving your credit utilisation ratio. |
Single EMI Management (Long-Term Boost) | Positive | Making timely payments on your new consolidated loan increases your score. |
Reduced Credit Utilization Ratio | Big Boost | If you clear high credit card balances (above the 30% limit), your score improves significantly. |
Defaulting on New Loan (High Risk!) | Major Drop | If you miss EMI payments, your score can drop by 50-100 points. |
Moves to Keep Your Score High
Debt consolidation isn’t just a financial strategy—it’s a game-changer for those drowning in multiple EMIs. Just like Nisha in Mumbai, many individuals are struggling with high-interest debts, juggling multiple due dates, and feeling the pressure of rising expenses. Consolidating debts into a single loan with a lower interest rate offers relief, making repayments simpler and more affordable.
Also Read – How a Personal Loan for Debt Consolidation Can Save You Money
With interest rates ranging from 10% to 18%, debt consolidation helps in reducing overall interest costs. For instance, if someone is paying ₹10,000 per month on multiple loans, consolidation could reduce this amount to ₹7,000, offering extra breathing room in their budget. Moreover, timely repayments boost credit scores, opening doors to better financial opportunities in the future.
However, consolidation isn’t a magic fix—it requires smart planning, responsible spending, and choosing the right lender. Avoiding high processing fees, opting for an optimal tenure, and maintaining disciplined repayments are key to making the most of this move.
In 2025, with economic uncertainties and rising interest rates, debt consolidation stands out as a “paisa vasool” financial move, offering stability, savings, and a stress-free future. The choice is clear—simplify your EMIs, save money, and regain control over your finances!
Does debt consolidation benefit every person who uses it?
If you hold large debt with high rates and maintain good credit, then debt consolidation can be most helpful. You may create problems when you have uncontrolled spending.
Does debt consolidation impact my credit standing?
When you apply, credit agencies perform a hard inquiry that temporarily decreases your credit score. Regularly paying off your debt will show improvement in your credit score over time.
What particular debts can I put together into one loan?
People usually consolidate their credit card balances with personal loans and student loans plus any outstanding medical costs.
What expenses do debt consolidation loans include for customers?
Lenders include fees like origination costs, prepayment punishments, and balance transfer payments. Always check the fine print.
How much time does it take to repay my combined loan?
The loan payment term you select will determine how long you have to repay the loan, which usually ranges from 2 to 7 years per your chosen plan.
