Loan Consolidation: Is Taking One Personal Loan To Take All Outstanding Debt A Smart Match? | Mint

Personal loans: Have you considered whether a borrower – with multiple outstanding loans – is considering taking a fresh loan? Is it advisable for him/her to take a fresh loan and use the proceeds to retire all the existing loans? Typically, this is a common practice and it offers various benefits such as ease and comfort to manage only one loan. However, you must ensure that you do not end with higher total costs such as processing fees and insurance costs. Therefore, your debt should only consolidate if you are confident that you will not have any fresh debt. Debt Consolidation: These are some of the most important benefits lower interest interest: If your new personal loan offers a lower rate than your current loans (credit card debt, payday loans, etc.), you can save a lot on interest. Credit point: If you clean up numerous debt with a fresh loan and then pay your personal loan on time, your credit rating will greatly improve. SINGLE EMI: Rather than watching 3 to 4 different deadlines, you only have one installment to pay each month – which for obvious reasons is easier to drive. Fixed term of office: Some small loans or even credit card debt may not have a clear date of closure of the loan. On the other hand, a personal loan usually has a fixed timeline (for example, 3 or 5 years). Therefore, you know exactly when you will be debt -free. Less tension: Less spiritual burden of detecting multiple borrowers, different fines and deadlines. Disclaimer: Mint has a fusion with fintechs to provide credit, you must share your information if you apply. These bonds do not affect our editorial content. This article only intends to educate and distribute awareness about credit needs such as loans, credit cards and creditworthiness. Mint does not promote or encourage credit as it has a set of risks such as high interest rates, hidden costs, etc. Visit here for all personal personal updates that were first published: 28 Apr 2025, 07:22 PM IST