Debt consolidation is a refinancing process where an individual usually opts for a secure loan like loan against property for a debt consolidation loan to pay off or consolidate their existing lines of credits.
-> Points to consider before availing for a debt consolidation loan - Before availing for a debt consolidation loan, an individual should calculate the amount of their existing debt along with the interest that they are paying at the moment.
Based on this calculation, you can determine the number of funds that you need to borrow from a lender.
-> The individual should also determine if he/she will be able to pay off the loan that they are availing to consolidate their existing debts. For this, they need to calculate the EMI amount and assess their repayment capability.
-> Individuals should also consider the tenor period of the debt consolidation loan that they are availing. Longer tenor means low EMI amount but it will also increase the payable interest in the long run. A shorter tenor period translates to high EMI but faster debt repayments.
Applying for a secured loan like loan against property for debt consolidation will ease the burden of debt since the individual will only be paying EMI for one loan instead of multiple such loans.
Loan against property for debt consolidation also comes with affordable interest rates and longer repayment tenure which makes it easier for the borrower to pay off the credit.
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