In this guide
When you juggle several EMIs, credit card bills and app loans, it becomes easy to miss a due date, and each miss pulls your CIBIL score lower. A debt consolidation loan replaces many repayments with one EMI. Done carefully, it can lower your monthly outgo and help you rebuild your credit. Done carelessly, it can add more debt.
Quick answer: A debt consolidation loan is a single personal loan used to close several smaller, often costlier debts. It helps when the new EMI is lower and affordable, and when you stop taking new loans afterwards. With a low CIBIL score, NBFCs and private lending partners may assess you based on your salary and repayment capacity.
How debt consolidation works
- List every loan, card and app loan with its outstanding amount and cost.
- Take one personal loan large enough to close the costliest debts.
- Close those debts and collect closure letters.
- Repay only one EMI from then on.
When it makes sense
- You have high-cost debts such as credit card dues or short-term app loans.
- The new EMI is lower than the total of your current repayments.
- Your income is stable.
- You are ready to stop using new credit for a while.
When it does not
- The new loan costs more in total than your current debts.
- You plan to keep using the cleared credit cards.
- Your income is uncertain.
Example of the effect
| Before | After | |
|---|---|---|
| Number of repayments | 4 to 6 each month | 1 EMI |
| Due dates | Spread through the month | One date |
| Risk of a missed payment | High | Lower |
Figures are illustrative. Check your own numbers with the EMI calculator.
Applying with a low CIBIL score
Lenders will look at your salary, your existing EMIs and the reason for your current score. Showing a clear plan to close specific debts helps. Read 7 ways to reduce your EMI burden and how to escape the payday loan trap.
Indifunds, based in Noida, helps salaried applicants across Delhi NCR apply through its lending partners. No fee is collected before approval. See the personal loan for low CIBIL score page.
Frequently asked questions
Will consolidation improve my CIBIL score?
Over time, yes, if you close the old debts and pay the new EMI on time.
Can I consolidate credit card debt?
Yes. Card dues are often the most expensive debt and a common reason to consolidate.
Should I close my credit cards after paying them?
Keeping an old card open with zero balance can help your credit history, as long as you do not use it heavily.
Check your loan eligibility
Salaried in Delhi NCR? Low CIBIL score or a past rejection? Our team will assess your profile.
Takes about 2 minutes. No upfront charges.
