Debt consolidation is the procedure of bringing different lines of credit together into one single loan. Typically done to avail better rates of interest, borrowers can avail loan against property for debt consolidation.
Along with lesser paperwork and fewer accounts to handle, borrowers also have the option to avail additional top-up loans in case they find themselves in a financial emergency.
However, it is crucial they take note of the steps discussed below so that they can avail these benefits at their fullest –
Debt evaluation: The first step of debt consolidation is calculating the total expenditure of repayment of different lines of credit. This includes every loan account that is still active and subsequently, the EMI repayments to clear them.
Selection of loan scheme: While selecting a loan, borrowers should check interest rates on different offers. Typically a loan against property offers competitive interest rates especially because these are secured loans.
EMI calculations: The total repayment amount and EMIs should be calculated and compared. This includes checking different tenors and relevant rates of interest too.
Eligibility and document requirements: Checking all eligibility requirements and arranging the documents from ahead saves time during the application of a loan against property for debt consolidation.
Utilisation of funds: Finally, once the loan amount is available to a borrower, they must use it to prepay all existing loan accounts. Clearing them fast allow borrowers to save on any EMI repayment.
Following the steps discussed above can effectively help a borrower to save the maximum on their loan repayments.
Additional Read : Here Is Advantages And Disadvantages Of Debt Consolidation
