2 min read
25 May 2021

Repaying multiple debts can interfere with your busy schedule and lifestyle, causing you to cut back on your spending significantly. Having multiple debts also means paying more in terms of interest. During times like these, save both time and money by consolidating your debts with a personal loan. A collateral-free personal loan for debt consolidation helps you pay only one EMI with one due date, which is easier for you to monitor.

Secondly, paying off all your debts at a single interest rate is more affordable. It eliminates multiple charges or fees levied on you by lenders, whether for missing an EMI payment or using an online account. Understanding the costs of a personal loan taken for debt consolidation can help you know how much you can save and which lender to choose for this loan.

Fees and charges on a personal loan for debt consolidation

Here is a look at the usual fees and costs, including personal loan interest rates:

  • Interest rates affect your monthly EMIs and can range anywhere from 10.99% to 18% or more per annum.

Additional read: 5 reasons why you should finance your home renovation with a personal loan

  • The processing fees finance the processing of your loan application and are up to 4% of the loan amount.
  • EMI bounce charges are incurred every time your EMI doesn’t go through because of a lack of funds in your account. EMI bounce charges are usually Rs. 1,200 per bounce.
  • Late EMIs incur penal charges. These charges are usually up 2-4% default interest with added taxes per month.
  • A secure fee is charged to secure and maintain your online date and information. A secure fee is usually Rs. 4,499.
  • Foreclosure charges are incurred when you repay your loan amount before the tenor. These charges are usually based on the remaining principal amount. The interest charged on the same is usually 4% plus taxes on the outstanding principal amount.
  • Paying an amount greater than your EMI amount can incur prepayment charges. Some lenders allow you to part-prepay if the excess amount is more than one EMI at 2% interest plus taxes on the part-prepayment amount.
  • Annual maintenance charges are solely for maintenance and can be 0.25% on the sanctioned amount.

Additional read: 5 reasons why you should apply for an emergency loan from Bajaj Finserv

How to maximise savings on a personal loan for debt consolidation

Plan your consolidation loan carefully to achieve credit card settlement, fix your bad credit score and consolidate debt. This involves choosing a lender that helps you achieve your financial goal instead of making repayment difficult.

Apart from looking up personal loan interest rates, personal loan fees & charges and debt consolidation norms, you should also consider added benefits. Look for a lender like Bajaj Finserv, which offer a Flexi-loan facility, making repayment easy and convenient with interest-only EMIs. Choose this loan, and you can forgo any charges on prepayment too.

Additionally, a personal loan for debt consolidation comes with zero statement charges. Next, use a personal loan calculator to forecast your financial progress. Remember to check eligibility for a personal loan before applying to avoid rejection and further harm to your credit score.

You can even try pre-approved offers from Bajaj Finserv and get ready-to-use money available for you in an instant. Check out your personalised pre-approved offer today!

Keeping this information in mind, take a personal loan to consolidate your debt and live a life of financial freedom. Remember to continue saving as you repay your debt, as this will come to your aid in the future.
 

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