Debt creates stress and frustration in life. It is wise to clear off your debts as soon as possible. If you are not able to clear your debts on time, debt consolidation can be a rational choice. Debt Consolidation translates to taking a lump sum amount as a single loan to clear off your multiple debts at varying interest rates. Debt consolidation manages your multiple EMI payments and creates one single payment for each month. One of the best ways to take advantage of debt consolidation is by taking a loan against property. This solution is comfortable, easy, and hassle-free helping you to manage the deadlines of multiple repayments. Existing debts such as credit card outstanding, personal loans, auto loans, etc., with different deadlines can be clubbed into one single payment plan to make it easier to repay. Another important benefit of debt consolidation is that it reduces your loan obligation.
6 Reasons to Opt for Loan Against Property for Debt Consolidation Let us understand why you should opt for debt consolidation –
1) Immediate Funds to pay off your Debts
If you have an immovable asset, you can pledge it to raise money for repayment of debt. Lenders provide funds for the valuation of the property. If the prices of the property are high, you can avail of maximum funds of up to ₹3.5 crores for a prime commercial or residential property. Once the loan amount is disbursed, you receive adequate funds to pay off your debt obligations.
2) Lower Interest Rates
Another important benefit of opting for debt consolidation with a loan against property is the lower interest offered by the lenders. By offering a high-valued property for a loan, you can get substantial funds for repayment. If you are offering a prime property, you can even negotiate with a lender for lower interest rates.
3) Longer Tenure with easy installments
When you have opted for debt consolidation, it is wiser for a borrower to choose a longer tenure. With a longer tenure, you can minimize the due monthly instalments. It would allow you to save money to manage urgent expenses. You can choose to go for debt consolidation from a lender offering longer tenure at a lower interest rate.
4) Pledge any Property to get Maximum Funds
For a loan against the property; you can pledge any type of property you own. It can be your occupied home, vacation home, commercial property, office space, etc. The borrower can pledge the property to get the maximum value that can offer substantial funds for debt repayment. The lenders too feel secure and assured as there is collateral involved; so they are willing to offer a loan against a property with a high appreciation value at a lower interest rate.
5) Become Debt-Free quickly
When a borrower is under burden due to multiple instalment repayments, debt consolidation allows you to repay debt quickly and easily. It makes debt management easier with sufficient funds at a lower interest rate. LAP can be approved within 3-4 days depending upon the valuation of the property and your financial profile. As you get the sanctioned funds, you can pay off your existing debt quickly.
6) Do effective Monthly Financial Planning
When you miss multiple deadlines for debt repayment, financial planning becomes critical. To avoid defaults in payment, debt consolidation helps you to work on effective monthly financial planning. With maximum sanctioned funds by the lender, you can pay off all your debts easily. Importance of Debt Consolidation A borrower is always under stress when he or she has multiple debts running. Managing household expenses with multiple debt payments is very challenging and tiresome. Getting rid of debt comes with assurance and peace of mind, and hence, debt consolidation is a feasible option for quick debt management. It enables borrowers to merge loans for ease of repayment. For example, if you have two to three loans with different deadlines as well as credit card debt, then clubbing all of them into one single monthly payment is definitely convenient.
Debt consolidation offers borrowers a sigh of relief allowing them to manage debt and household expenses. With debt consolidation, borrowers can avoid the situation of insolvency. Debt consolidation offers innumerable benefits. Firstly, it improves the financial status of borrowers by offering an opportunity to enhance their creditworthiness. Secondly, it offers loans with longer tenure and lower interest rates. Thirdly, with a LAP, you can lower the monthly obligations in a single affordable payment.