4 simple ways to consolidate your debts

Managing multiple debts with different due dates and interest rates can be overwhelming and expensive. Debt consolidation allows you to club all your smaller loans into one. Be it an outstanding bill of your credit card or a loan you take for your business, you can make repayment of all your debts into one by consolidating them. There are several ways to do this without paying expensive interest rates or charges.

✅ Check your pre-approved loan offer with phone number and OTP → Apply online in 5 minutes → Convert multiple debts into one single EMI payment.

The good news is that debt consolidation offers a practical solution to simplify your financial life. Read on to learn four simple tips to help you consolidate your debts effectively.

1. Get yourself a debt consolidation loan

Debt consolidation loan

Consolidation loans are unique loan offerings aimed at helping you clear your outstanding dues. The idea of such a loan is to replace multiple high-interest EMIs with a single instalment at a reasonable interest rate. A low interest rate personal loan can be a great option to consider.
 

How it works: A single loan makes repayment more manageable as you have only one loan to tackle rather than repaying multiple debts with varying interest rates.
 

Key advantages:

• Simplifies finances by consolidating multiple debts
• Often provides lower interest rates than existing debts
• Single monthly EMI easier to track and manage
• Can improve credit score over time with regular payments
• Flexible repayment options available
   

Pro tip: Calculate the total interest you're currently paying across all debts and compare it with a consolidation loan's total cost. The savings can be substantial, especially if your existing debts carry high interest rates. 

2. Switch your credit card balance to another lender

Credit card balance transfer

If you feel that your credit card lender is not offering a higher credit limit or has a high interest rate, you can always switch providers. A credit card balance transfer involves transferring your current credit card balance to a new lender.
 

How it works: Even though the balance remains the same, you may be able to benefit from a higher credit limit, along with more favourable interest rates.
 

Key advantages:

• Access to promotional interest rates from new lender
• Potentially higher credit limit
• Opportunity to consolidate multiple credit cards
• Better terms and customer service
• Helps manage high-interest credit card debt
   

Example scenario: If you're paying 36% interest on a credit card balance of Rs. 1 lakh, transferring to a lender offering 18% interest could save you thousands in interest payments over time.
 

3: Consider a home loan balance transfer

If your home loan has a high interest rate or poor customer service, you can always choose to do a balance transfer. This means that your loan balance will shift to a new lender and your subsequent EMIs will be made to the new lender.
 

How it works: If you have multiple home loans, you can move these together to the new lender and club them. This is the most convenient and easy way to consolidate home loans.
 

Key advantages:

• Consolidate multiple home loans into one
• Access to lower interest rates
• Improved customer service from new lender
• Potential to access top-up loans
• Special discounts and offers from new lender
• Simplified single EMI payment
   

Pro tip: Compare the interest rate difference carefully. Even a 0.5% reduction in interest rate on a large home loan can result in significant savings over the remaining tenure.

4. Apply for a personal loan

This is perhaps the most flexible option for when you want to merge your debts. A personal loan usually allows you to borrow a considerable loan amount ranging from Rs. 40000 - Rs. 55 lakh.

Check your eligibility for a personal loan from Bajaj Finance with just your phone number and OTP. The interest rates range from 10% to 31%.

How it works: You can use the personal loan to pay off all your existing debts and then repay the personal loan through a single, flexible EMI structure. An instant personal loan comes with quick approvals and convenient repayment options.

Key advantages:

• High loan amounts for substantial debt consolidation
• Flexible tenure options (12 months to 96 months)
• Quick approval
• Funds disbursed within 24 hours*
• Flexi Hybrid Term Loan facility available for flexible interest payments
• No collateral required—completely unsecured
• Competitive interest rates
• No hidden charges—complete transparency
   

Why personal loan for debt consolidation? Personal loans offer the most flexibility because they're unsecured, have reasonable processing fees and allow you to manage various types of debt—credit card bills, personal loans, and more—through one convenient monthly payment.

Debt consolidation offers multiple benefits beyond just simplification:
 

• Lower interest rates: Consolidating high-interest debts into a lower-rate loan can significantly reduce your total interest payments.
• Simplified finances: Managing one EMI is far easier than juggling multiple payments with different due dates.
• Improved credit score: Consolidation can help improve your credit profile by reducing credit utilisation ratio and demonstrating responsible debt management.
• Reduced financial stress: One payment means less mental burden and easier budgeting.
• Better cash flow: Flexible repayment terms can improve your monthly cash flow and financial flexibility.
• Faster debt payoff: With proper consolidation and management, you can often pay off debt faster.
   

Choosing the right consolidation method

The best debt consolidation method depends on your specific situation:

• For credit card debt: Personal loans or credit card balance transfer typically work best
• For multiple types of debt: Personal loan consolidation offers maximum flexibility
• For home loans: Home loan balance transfer is often the most cost-effective
• For urgent consolidation: Instant personal loan provides fastest access to funds
   

Steps to consolidate your debts

1. Assess your total debt: List all your debts, interest rates, and monthly EMIs
2. Calculate potential savings: Use loan calculators to compare consolidation options
3. Compare lenders: Evaluate different lenders' offerings, interest rates, and terms
4. Check your eligibility: Verify you meet basic requirements (age, income, credit score)
5. Prepare documents: Gather necessary KYC documents and income proof
6. Apply for consolidation: Submit your application to the chosen lender
7. Use funds to pay debts: Once approved, use the loan to clear all existing debts
8. Manage new loan responsibly: Make timely payments to improve your credit profile
    

Important consideration: Before consolidating, ensure you address the underlying spending habits that led to multiple debts. Consolidation is most effective when combined with disciplined financial management.