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Debt Consolidation Calculator_WC

Debt Consolidation is the process of borrowing a single loan to pay off multiple loans. To consolidate your debt, you can avail of two different types of debt consolidation loans: secured and unsecured. Secured debt consolidation loans such as a Loan Against Property involve pledging a collateral whereas unsecured debt consolidation loans are sanctioned based solely on your credit score and income profile. 

What is a Debt Consolidation Loan Calculator?_WC

What is a Debt Consolidation Loan Calculator?

A debt consolidation calculator is a tool that one can use to figure out the amount of money or loan value they would need to combine all their loans into one. The debt consolidation loan allows you to understand many important things.

First, with this calculator, one can understand whether they can afford the debt consolidation loan EMI they are planning to take or not. Second, the calculator tells borrowers their monthly EMIs and once a borrower has this information, they can plan their monthly budget in such a way that they are not only able to easily accommodate their monthly EMIs into their budget but are also able to save some money each month and keep it aside for their emergency fund. 

Benefits of Debt Consolidation Loan_WC

Benefits of Debt Consolidation Loan

Borrowers often ask why they should take a debt consolidation loan and combine all their loans into one. Let us look at the benefits of debt consolidation loans. 

1. It is Far Easier to Manage a Single Loan than Multiple Loans

When you have multiple loans running at the same time, it may become difficult to keep track of all the EMIs. This often leads to missed payments, which in turn may draw late penalties. When you consolidate your debt, you do not have to remember multiple due dates. There is one EMI to be paid each month and only one payment due date that you must keep track of. 

2. Debt Consolidation Loans are Low-Interest Rate Loans

Compared to the rate of interest charged on credit card bills and personal loans, the interest charged on debt consolidation loans is quite low, especially if you have opted for a secured debt consolidation loan. Thus, when you combine all your debts into one, your overall EMI payment goes down due to the low-interest rate. 

3. Longer Repayment Tenor

If you are availing of a secured debt consolidation loan, such as a Loan Against Property, to consolidate your debt, you will get the option to choose a long repayment tenor. This long tenor will enhance the affordability of the loan for you and allow you to repay the loan comfortably. 

4. Helps you Improve your Credit Score

When you take a big loan to clear all your small loans, you automatically improve your credit score. Further, you can make your CIBIL score look even better by paying all your debt consolidation loan EMIs on time.

If you are planning to opt for a Loan Against Property for Debt Consolidation, it is recommended that you use a debt consolidation loan calculator.

Steps to use Debt Consolidation Calculator_WC

Steps to Use Debt Consolidation Calculator

The debt consolidation calculator is an easy to use tool. You can use it yourself with minimum assistance required. But just to make things even easier, here are the steps.

  1. First you have to fill in your existing loan details. It could be loans such as personal loan, Home Loan, student loan, business loan or any other loan.
  2. For each loan you have, you have to input the details separately that may include the balance loan amount, remaining tenor and the current rate of interest. You can have a minimum of 2 and a maximum of up to 5 loans at a time.
  3. Each time you fill the details for a loan you have, you have to “add it to consolidator”.

Once done, click on done. The loan calculator will make plain how much money you can save with a debt consolidation loan.

Things to Keep in Mind While Opting for Debt Consolidation_WC

Things to Keep in Mind While Opting for Debt Consolidation

If you are planning to go for debt consolidation, keep these four things in mind: 

  • Availing of a debt consolidation loan requires a borrower to pay an upfront debt consolidation fee. Talk to different lenders and negotiate for a low debt consolidation fee. This will help you save money in the long run. 
  • If you are applying for a debt consolidation loan, know that your lender will take some time to assess your application. They will check your creditworthiness by looking at your credit score and they will assess your income profile and job stability before deciding on your loan application. So, make sure to present yourself as a low-risk borrower through your application. 
  • If you are planning to take a debt consolidation loan to clear all your debt, make it a point to follow a disciplined repayment strategy. Skipping payments and going down the non-repayment path with a debt consolidation loan can lead to your CIBIL score going down considerably and your chances of getting another loan in the future becoming nil.

*Terms and conditions apply.

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