Why Does One Require Debt Consolidation Loan

Posted by reema sharma on August 29th, 2019

Debt consolidation loan is a kind of financing that helps to pay a number of high-interest loans with one loan on low interest. Banks, financial institution and online lenders are sources of debt consolidation loans. The rate of interest and monthly instalments remain fixed and depending on the amount of loan, the term is usually between 2-5 years.

The debt consolidation loan should be large enough as it is used to repay the smaller loans in total at one time. However, one should be aware of the fact that debt consolidation loan restructures the debt making it convenient for the customers. It neither reduces the amount one owes nor does it get eliminated altogether.

Debt consolidation loans are beneficial as the interest rates are lower and every month there is only one cheque because only one monthly payment is made on one payment date. Such loans help to pay off debts faster. It is a way to make payment of bills simple and save money for those who deal with a number of unsecured debts such personal loans, medical bills or credit card bills. So, the best way to consolidate other loans into one is by taking one large loan from banks or finance companies and utilize that money in paying off a number of smaller loans.

How it consolidates other loans into one

You may opt for debt consolidation by utilizing a home equity loan or debt consolidation. Sometimes, home equity loan may prove to be risky because your property could be acquired by the bank if you fail to make the payments. With Debt Consolidation Loan the existing loans may not always be consolidated with the new loan. In case of debt consolidation loans, the debts remain separate but the payments are consolidated. When monthly payments are made to the lender, they divide the payment and disburse it to the creditors. Debts can also be consolidated with personal loans. You need to calculate the total amount that you need to pay for unsecured debts and the average interest that is to be paid on those debts. Next one should consider their monthly budget, calculate the expenditure on basic necessities and the amount of money left after making these expenditures. If the amount of money left is sufficient, organizing the budget helps to pay off the debt but it is not applicable for those who fall behind on unsecured debts. This is when one requires a debt consolidation loans.

A Non Banking Finance Company

DFLTD, an RBI registered NBFC-ND company offer their customers a number of secured and unsecured loans. They provide Debt Consolidation Loan in the form of loan against property which are long-term and secured in nature. Other than this, they provide personal loans, working capital loans, commercial purchase loans and loan against property. These loans cater to a number of business and personal requirements. The product benefits that customers obtain are attractive interest rates, convenient EMI options, quick disbursements and high level of customer interaction for customization of loans.

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reema sharma

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reema sharma
Joined: April 11th, 2019
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