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Ananya Shrivastava
Ananya Shrivastava is a Content Writer at LoansJagat, specialising in finance-focused news, blogs, and long-form articles on Indian markets, RBI policy, personal finance, and lending. She has authored over 450 blogs and 250 news pieces, combining technical knowledge with rigorous research to simplify complex financial concepts into clear, engaging content. With a marketing-driven lens and sharp editorial judgment, she consistently achieves top Google rankings while ensuring every claim is backed by verified data.
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Personal loan consolidation lets you combine two personal loans into a single loan with one EMI. It works best when the new loan carries a lower interest rate than your existing loans combined. Banks like SBI and HDFC Bank offer this, and marketplaces like LoansJagat let you merge multiple loans in one application.
Key Takeaways
If you are managing two personal loans and two different maturity dates, you are not the only person. Many salary earners in cities like Delhi, Mumbai, and Bangalore end up taking a second personal loan for events such as a marriage ceremony, a hospital bill, or a house repair when they are still paying off their first personal loan. This article seeks to explore who can consolidate two personal loans, how the process is done in India, the cost of consolidation, and an example of repayment after consolidation.
Personal loan consolidation means replacing two or more personal loans with a single new loan. The new loan pays off your existing balances directly to the old lenders. You are then left with one EMI, one due date, and one lender to deal with. This differs from a balance transfer, which usually moves just one loan to a new lender at a better rate.
Consolidation is built specifically to merge multiple debts, including personal loans and credit card dues, into one account. LoansJagat's debt consolidation product allows borrowers to merge up to 50 personal loans, short term loans, and credit card outstandings into a single EMI.
Yes. Any bank or NBFC that offers personal loans will consider a consolidation loan, provided you meet its income, credit score, and tenure conditions.
Lenders do not always use the word "consolidation" on their application forms. You may see it listed as a regular personal loan, a debt consolidation loan, or a top-up loan. The purpose you select while applying should state debt consolidation, since this affects which lender products you are shown. LoansJagat lets borrowers compare consolidation loan offers from over 40 banks and NBFCs on a single platform.
The process has four steps: list your outstanding loans, apply for a new loan large enough to cover both, get the new loan approved, and close the old loans with the disbursed funds.
Most lenders disburse the consolidation loan directly to your bank account within two to five working days after approval, based on standard personal loan processing timelines followed across NBFCs and banks.
One needs to have a steady salary income, credit score more than 700+ and minimum one-year experience of working to opt for a consolidation loan.
According to the eligibility requirements of LoansJagat for debt consolidation loans, one needs to be:
The best method is to compare consolidation options among different lenders and select the one with the lowest all-inclusive rate and without any foreclosure fees.
Here is the sequence that one can follow:
One has to bear a processing fee, GST on charges and foreclosure fees if his/her loan has fixed interest rates.
Always ask your existing lender in writing whether your loan is fixed or floating rate before assuming it can be closed free of charge.
Loan consolidation combines two or more loans into one, while a balance transfer moves a single existing loan to a new lender at a lower rate.
Rohan, a 29-year-old marketing executive in Delhi, has two personal loans. The table below shows his numbers before and after consolidation, based on a worked example similar to LoansJagat's debt consolidation case study.
*T&C Apply
LoansJagat notes that consolidation through its lender network can reduce EMIs by up to 50% and extend tenure up to 7 years, depending on the borrower's credit profile and the rate difference secured. Rohan's saving of ~₹970 a month falls on the modest end of that range.
You need income proof, identity proof, address proof, and a statement of your existing loan accounts.
The main risk is extending your repayment tenure so much that you end up paying more total interest, even though your monthly EMI looks smaller.
Other risks include:
Two personal loans running at the same time usually means two interest rates working against you and two dates to remember every month. Consolidating them into one loan can lower your outflow if you secure a rate meaningfully below your current average and avoid stretching the tenure too far. Compare real offers, check the foreclosure terms on your existing loans, and calculate the total interest over the full tenure before signing on the new loan.
Yes, a new lender can pay off personal loans from two different banks or NBFCs and issue you a single combined loan.
There may be a small, temporary dip when the old accounts close and a new account opens, but timely payments on the new loan rebuild your score over a few months.
Compare the quotes from several lenders, make sure your existing loans are floating rate in order to dodge any foreclosure costs, and choose the lowest total cost of borrowing instead of just the lowest interest rate.
The most preferred credit score is above 700, while some NBFCs accept even lower scores at a somewhat higher rate.
Yes, self-employed applicants can consolidate loans, but lenders usually ask for 2 to 3 years of income tax returns and business continuity proof.
Not if your existing loans are on floating rates, since the RBI's 2025 Directions prohibit foreclosure charges on floating rate loans taken by individuals for non-business purposes.
Once approved, most lenders disburse the consolidation loan within 2 to 5 working days, based on standard processing timelines followed by banks and NBFCs.
Yes, both terms describe combining multiple existing debts into a single new loan with one EMI.
Yes, many consolidation loans allow you to combine personal loans and credit card dues into one loan.
A missed EMI attracts late payment charges and can lower your credit score, just as it would on any personal loan, so budget the new EMI carefully before switching.
