Consolidation changes more than the EMI. Set these costs against the interest saved when consolidating debt:
- Foreclosure charges on old loans: Each existing lender sets its own. Ask for a payoff letter that shows the charge and the exact closing amount.
- Processing fee on the new loan: It appears in the Key Fact Statement and is deducted from the loan amount, so borrow enough to clear every debt.
- Extra interest from a longer tenure: Compare total interest at each tenure, not only the EMI.
- Interest during the gap: When consolidating debt, every day between the new loan arriving and the old debts closing adds interest on both.
Add these up and subtract them from the interest consolidating debt saves. If the result is small, keep the old loans and pay down the costliest one first.
Deepa's consolidation
Deepa is 34, a salaried textile export accounts executive in Salem, with a monthly income of Rs. 58,000; her CIBIL score is 727. The 2 debts above were hers, costing Rs. 13,616 a month. For consolidating debt, she borrowed Rs. 1.7 lakh at an illustrative 15% per annum and set the EMI for 2 years beside 3.
EMI = P × R × (1 + R)^N ÷ [(1 + R)^N − 1]. Here P = Rs. 1,70,000, R = 15 ÷ 1,200 and N = months.
| Tenure | Monthly EMI (Rs.) | Total interest (Rs.) | EMI as share of salary (%) |
|---|
| 24 months (2 years) | 8,243 | 27,826 | 14.2 |
| 36 months (3 years) | 5,893 | 42,152 | 10.2 |
Last updated: 26th October, 2026
On 24 months, her monthly outgo falls by Rs. 5,373 in the first year, and total cost falls by up to Rs. 6,497 after the fee. On 36 months, the EMI is lower still, but total cost rises by up to Rs. 7,829. Deepa chose 24 months.
What can delay approval: a CIBIL score below 650 or existing EMIs that take up a large share of your income. Names or addresses that do not match across documents, and more than one loan application in the same month, can also slow it down.
Thinking of consolidating debt? With a Bajaj Finance Personal Loan, you can borrow Rs. 40,000 to Rs. 75 lakh, subject to eligibility. Check your loan offer with your phone number and a one-time password (OTP) → apply online → receive funds within 24 hours* of approval.
