How can I get a consolidation loan: steps towards a debt-free life ?

Key takeaways:
 

1. One with a good credit score of above 700 points can easily get a debt consolidation loan from banks.
    
2. People with bad credit scores can get debt consolidation loans from NFBC banks, secured loans, and third-party loans. 
    
3. One needs to provide proper, verified documents to get the debt consolidation loans.
    
4. SBI debt consolidation loan interest rates start from 10.00%

How can I get a consolidation loan?

This is the common question people often ask when it comes to consolidating multiple loans. The easiest way is to approach the banks and check the credit score. If your credit score is good enough to get you a debt consolidation loan. Then congratulations! You are now ready to pay for one loan instead of others.

There are a few steps to get the consolidation loan, which are as follows:

Hence, this is how one can get a consolidation loan from banks.

Which banks offer debt consolidation loans in India?

This is the list highlighting which banks offer debt consolidation loans in India:

Note: The information is largely taken from Google.

These are some of the names illustrating which banks offer debt consolidation loans in India.

Debt consolidation loan eligibility:

It is not true that banks blindly give you debt consolidation loans in India. The people are selective and need to pass debt consolidation loan eligibility requirements. This eligibility varies from person to person.

Let us look at the criteria for debt consolidation loan eligibility: 

Hence, one needs to fall under these criteria for debt consolidation loan eligibility. 

Debt consolidation loan for CIBIL defaulters:

It would not be strange that it is difficult to get a debt consolidation loan for CIBIL defaulters. This is because most of the banks still need a credit score of more than 700 to get the debt consolidation loans. 

Still, there are options where banks can allow debt consolidation loans for CIBIL defaulters, which are as follows: 

1. Secured loans = normally, a personal loan is an unsecured loan, but when you have a credit score below 700 points. You need to keep something as security with the bank to get a debt consolidation loan. For example, keeping your land, gold or any precious stuff as collateral.

2. NFBCs' liberty = there are some banks like i2ifunding and Landbox that show some liberty in terms of credit score for debt consolidation. They still allow people with a 650 credit score to take the debt consolidation loans.

3. Third-party support = if not you, then someone else. Yes, you can do it. Someone else you know and are close to can give a guarantee on behalf of someone who has a good credit score. This boosts your chance of getting a debt consolidation loan from banks.

4. Other factors = sometimes banks also check your credit history rather than just your credit score, which can increase the chances of getting the debt consolidation loans for you if you have a low credit score.

Hence, this is how the banks offer a debt consolidation loan for CIBIL defaulters.

How can I get approved for a debt consolidation loan with bad credit?

This is the common concerto image: "How can I get approved for a debt consolidation loan with bad credit?” But yes, there is a way to get a debt consolidation loan with a bad credit score.

Here are some of the steps to follow:

1. Check your credit health and understand where you fall. If the score is above 700 points, you are safe for easy approvals. If the score is below 700 points, then things can be difficult for you.

2. Reaching the correct lender is so important that it affects the total approval. Banks like NFBCs and small financing banks allow debt consolidation loans with low credit scores.

3. Following up on the condition of banks, because bad credit health comes with a cost. You have to keep something as collateral to bank against your loan to create that trust with banks. 

4. Once you follow these steps or the process, you are ready to go with bank approval for your debt consolidation loan. 

Hence, this is how you can get debt consolidation loans from banks even if you have bad credit scores. 

How can I get a consolidation loan online?

One can now get a debt consolidation loan online. This creates a private and easy environment for the bank and borrower, with certain steps to eliminate waiting and long processes in banks hopping from counter to counter. 

Hence, this resolves the worry of how I can get a consolidation loan online.

SBI debt consolidation loan:

An SBI debt consolidation loan has specific eligibility criteria and a process to follow to obtain the loan.

Let us discuss the debt consolidation loan from SBI:

1. It lends up to 35,00,000 rupees for debt consolidation loans.
2. It provides an interest rate of between 10.00%.
3. The loan repayment tenure can be adjusted between 12 months and 83 months.
4. It takes up to 1.50% of the processing fees with GST. 

You need to apply for an SBI debt consolidation loan if your needs fall under these categories. 

Bonus tip: Do you know? According to the Economic Times, it has highlighted that in today’s generation, Gen Zs with a salary of 30,000 rupees are getting into debt of 4,000,000 rupees. This indicates how Gen Zs fall into debt traps easily. 

Conclusion:

A debt consolidation loan is a helpful option for people with multiple debts. One with a good credit score has no difficulty getting approved for it, but the real challenge is the one with a bad credit score. Still, options like NFBCs' banks, secured loans, and third-party guarantor loans can make approvals for debt consolidation loans. Therefore, it is not difficult in India for people with bad credit scores to get debt consolidation loans. 

FAQs

Is debt consolidation actually a good idea, or am I making things worse?  

Debt consolidation is a good idea, and one cannot make a worse decision by choosing to consolidate their multiple debts because this is the debt lifter process.

What are the best debt consolidation companies with bad credit? 

NFBC Banks, i2iFunding, and Lendbox are some of the companies that allow giving debt consolidation loans with bad credit scores.

What should I know about debt consolidation? 

Banks charge different interest rates on the debt consolidation loan; not every bank offers the same interest rates.

What is a debt consolidation loan? 

A debt consolidation loan is a type of loan which is given against your multiple debts at a certain interest rate. 

Is debt consolidation only available to people with perfect credit scores?

No, debt consolidation is not only available for people with good credit scores; even with bad credit scores, people can apply for it.

What is the full debt consolidation process?
 

You apply on LoansJagat, share your loan details, compare offers from 20+ banks, pick the best one, upload documents, and once approved, all your loans get paid off and you repay one single EMI.

What are the steps to consolidate loans?

Check eligibility in 2 minutes, share your existing loan details, compare lender offers, choose one, upload documents, and get your loans cleared after approval.

Is debt consolidation only available to people with perfect credit scores?

No, debt consolidation is not only available for people with good credit scores; even with bad credit scores, people can apply for it.

How long does debt consolidation take?

The eligibility check takes 2 minutes. After documents are submitted, it usually takes a few hours to a few days depending on the lender's verification and approval process.

What happens after I apply for debt consolidation?

A loan manager from LoansJagat gets in touch to understand your loan details, check your profile, and help you move forward with the right lender offer.

Why is a credit report needed for debt consolidation?

Your credit report shows all your active loans, outstanding amounts, and repayment history. Lenders use this to decide your eligibility and interest rate.

Do I need existing loan statements? 

Yes. Details of your existing loan outstanding balances help the lender calculate the total amount needed to close all your loans through the consolidation.

Do I need credit card statements? 

If you are including credit card dues in the consolidation, yes. The outstanding balance on each card needs to be verified before the lender can include it in the loan

amount.

Do I need foreclosure letters?

Foreclosure letters may be required by some lenders to confirm the exact amount needed to close each loan. This depends on the lender's process.

Do I need NOC from old lenders?

An NOC is usually issued by the old lender after your loan is fully closed, not before. Once your existing loans are paid off through consolidation, you can collect the NOC from each lender.