Alisha Antil
by on May 23, 2019
Numerous individuals in India have more than one loan that they have to pay EMIs for every month. Personal loans, home loans, business loans, car loans, and credit card dues are the most common forms of credits availed in the Indian financial market. But Indian consumers are rated among the most credit-responsible borrowers, higher than the US and UK. For a single individual, multiple simultaneous debts may be cumbersome to repay. It can become challenging to keep track of more than one loan, their repayment amounts, and dates, etc. That is where debt consolidation can be a viable financial option. Consolidating all existing debts with a single loan can help you get rid of the multiple EMIs and even reduce the interest burden in the process.

What is debt consolidation?

In its simplest definition, debt consolidation refers to availing one loan to settle all others and pay the EMI on that single loan. In other words, it entails bringing all your debts under one umbrella. Debt consolidation has numerous benefits, which makes it a preferred choice for borrowers with multiple debt accounts. Mostly, people avail this option to finance their non-asset debts such as students’ loan, personal loan, credit card bills, etc.

The most significant reason to go for debt consolidation is that it eliminates the headache of tracking multiple repayments, especially if they are across various lenders. Loan against property for debt consolidation has fast emerged as a solution for multiple debts. Loan against property or LAP, as the name suggests, is a loan that is availed against a property mortgaged as collateral. It reduces the risk for the lender, which is why it is one of the easier and more affordable loans to avail. You simply need to meet some easy loan against property eligibility criteria.

How can loan against property in India help consolidate debts?

Here are some features of LAP which make it the ideal option for debt consolidation.

1. Pay off your debt with the high loan amount- One of the defining loans against property features is the high loan amount you can avail. Most lenders decide the loan amount after evaluating the value of the property that you keep as a mortgage. You may avail a loan of up to Rs. 3.5 Crore from NBFCs like Bajaj Finserv. This high amount can be used to pay off all existing debts.

2. Reduce your financial burden with its long tenor- Unlike unsecured personal loans which generally have a shorter tenor, loan against property tenor is long and flexible. Bajaj Finserv, for example, offers tenors of up to 20 years for salaried people and up to 18 years for self-employed individuals. When you spread the loan amount across such a long tenor, it doesn’t become a financial burden as the EMI remains relatively low. Incidentally, Bajaj Finserv also brings you pre-approved offers which simplify the process of availing loans and thus, help you save time. You may avail these offers on personal loans, home loan, business loans, and a host of other financial products. All you have to do is share a few necessary details and check your pre-approved offer.

3. Payless with the lower interest rate- LAP interest rates are generally lower than that of unsecured loans like personal loans and credit cards. So, if you consolidate your debts using a LAP, you will end up paying a relatively lesser amount as interest over the principal loan amount.

Debt consolidation is fast catching up with other popular credit prospects in India as it relatively easier to repay. LAPs are among the best financial tools a borrower can utilize to consolidate existing debts. The minimal loan against property documents required also makes the entire process quick, smooth and convenient. It’s one of the most practical and sensible ways to repay your existing loans.
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