The state of your financial health has a major influence on your overall well being. With the finances being in good shape, you have lesser things to worry about and when your finances are not as good as they should be, things can easily get out of hand. A major concern in today’s time for all individuals is management of multiple debts availed. These debts tend to drain off the finances as the interest outgo for them becomes very high. In scenarios like these, debt consolidation can prove to be a great solution.
Debt consolidation is a practise wherein multiple debts are combined together into a single outstanding debt. This single new debt which comprises of all the old debts helps in reducing the overall interest outgo. Management and repaying the single consolidated loan becomes easier than paying EMIs for multiple debts and the lowered interest reduces the financial burden.
Applying for Personal Loan for this purpose is easy as the applicant needs to select a bank or a Non-Banking Financial Company (NBFC) whose eligibility criteria are fulfilled by him/her. It is important that the applicant has a high credit score, clean repayment track record, sufficient income and low financial liabilities.
The factors mentioned above play an important role in deciding the eligibility criteria as Personal Loans are unsecured in nature and hence are not backed by any mortgage security. These are mostly short term loans that are availed to repay scattered debts and are meant to be repaid in the short term.