Are you struggling to meet deadlines and payment due dates for the various loans under your belt? Are you at risk of going crazy just to remember when you need to pay all your bills plus your current debts? Well luckily, there’s a simple solution for that: debt consolidation.
What is Debt Consolidation?
Debt Consolidation is taking out another loan to pay off each and every one of your existing loans to merge them into just one loan. This is usually done through a personal loan from a reputable bank with fixed terms. This means you’d get one interest rate for all your debts, instead of having to remember multiple obligations with several due dates.
Creditors allow this for a number of reasons. First: it ensures the collection of dues for the smaller loans. Second, since it only has one due date, it also means it’s more likely that you will remember to pay for that one loan.
How to Apply for Debt Consolidation?
To consolidate your debt, you just need to apply for a personal loan that will give you enough to pay for your existing loans. Banks don’t normally care where you will use your personal loan, although you still have to check with your bank to be sure. Furthermore, also be sure to have the necessary documents and IDs in hand when you apply for the loan, so that you won’t need to return to the bank for more details. Here’s a list of general must-haves when applying for a personal loan:
- proof of income (COE, payslips for the past 3 months, business registration)
- at least 2 valid IDs
- proof of billing/residence
- 2 photocopies of your documents/IDs
- 2 2×2 and 1×1 photos
- latest ITR
Bear in mind that debt consolidation does not make your loan any lesser. This is just to make it more convenient for you to pay your loans. With that being said, please thoroughly read the terms and conditions of all kinds of loans that you are applying for to and find out if it is worth the switch.