Drowning in loans? Learn how debt consolidation can help you swim

Are you tired of multiple credit card bills and personal loan EMIs? Juggling different due dates, rising interest rates, and constant reminders can be exhausting—and no matter how much you pay, the debt never seems to go down. That’s where debt consolidation steps in.

Debt consolidation helps you combine all your outstanding debts into one easy EMI, reducing stress and making your finances easier to manage. With just one repayment to track, you get a clear path forward and a chance to pay off your debt faster.

Here’s how debt consolidation works and how you can get started.

What is debt consolidation?

Multiple loans and credit card bills can create financial instability. Debt consolidation helps by combining everything into one new loan, so you repay just one EMI each month.

What it achieves


It clears your existing debts and replaces them with a single loan that’s easier to track and manage.

Methods you can use


a. A debt consolidation loan (usually a personal loan) that you take out and use to pay off your other loans and credit card bills

b. A credit card balance transfer, where the bank pays off your old card dues directly, and you repay the bank

c. Less common options like a loan against property or a top-up loan, which also let you consolidate debts but usually require collateral

Debt consolidation loans in India are widely available through banks and Non-Banking Financial Companies (NBFCs), helping borrowers take control of their repayments in a simple and structured manner.

Benefits of debt consolidation

Once you understand what debt consolidation is, the next question is—why choose it? Here are the key benefits that make it a smart move for many borrowers:

1. One EMI, one due date

You replace scattered repayments with a single monthly EMI, making it much easier to track.

2. Lower interest potential

If your new loan has a lower interest rate than your existing debts, you can reduce the total interest you pay.

3. No more missed payments

With fewer dates to remember, you’re less likely to forget a payment and face late fees.

4. Less financial stress

Simplifying repayments gives you peace of mind and more confidence in managing your money.

5. Better credit score over time

Paying off multiple debts and staying regular with your new EMI can help improve your credit score.

6. Clear repayment plan

A fixed tenure and EMI help you see exactly when your debt will be fully paid off.

By rolling your debts into one loan, debt consolidation gives you a clean, structured way to regain control—and can save you both time and money along the way.

How to consolidate debt using a personal loan

If you’re ready to simplify your finances, here’s a step-by-step guide to help you consolidate your debts using a personal loan.

1. List your debts

Write down all your outstanding loans and credit card balances, along with their due dates and interest rates. This gives you a clear picture of how much you owe and helps you calculate the total amount you need to consolidate.

2. Check your credit score

A higher score can get you a better deal on your new loan. Use a free credit report tool and fix any errors before applying.

3. Compare loan options

Look at interest rates, processing fees, and tenures. A debt consolidation loan with lower interest and fair fees will save you more in the long run.

4. Choose your loan amount and tenure

Make sure you borrow enough to clear all your debts. Pick a tenure that balances a manageable EMI with reasonable total interest.

5. Apply and complete the verification

Go for digital-first options like video KYC for faster approval.

6. Repay your old loans

As soon as your funds are disbursed, use them to clear your loans or any other unsecured borrowings. This ensures your repayment plan is clean and streamlined.

7. Consolidate credit card debt into one loan

Use the remaining funds to pay off your credit card balances, particularly those with high interest rates. This helps you save money and ensures you’re no longer juggling multiple card payments.

By following these steps, you can go from juggling multiple repayments to managing just one and taking charge of your financial future.

FIRSTmoney from IDFC FIRST Bank: Simplify your debts

FIRSTmoney, a smart personal loan from IDFC FIRST Bank, is designed to make debt consolidation quick and hassle-free. It gives you a flexible, digital-first option to merge your existing debts into one easy EMI.

1. Loan amount approval of up to ₹10 lakh
2. Interest rates starting at 9.99% per annum
3. Repayment tenure between 9 and 60 months
4. Zero foreclosure charges, so you can close the loan early without penalty
5. 100% digital application with simple video KYC
6. Quick approvals and disbursals, often within just 30 minutes
7. Option to access more funds later up to your pre-approved limit

With these features, FIRSTmoney offers a smooth way to tackle your outstanding loans and credit card dues through debt consolidation. It’s a practical tool to simplify repayments and take back control of your finances.

How debt consolidation works: A case study

Rajesh had three different debts to manage, each with its own EMI, interest rate, and due date. After consolidating through FIRSTmoney, he replaced them all with one simple loan.
 

By consolidating debt with FIRSTmoney, Rajesh reduced his total EMI from ₹8,300 to around ₹6,000 and now manages just one repayment instead of three.

Along with a lower interest rate and no foreclosure charges, he benefits from a smooth digital process, turning multiple debts into a single, easy-to-track plan.

Staying debt-free after consolidation: Smart post-loan tips

Debt consolidation gives you a fresh start, but it’s important to stay disciplined to avoid falling back into old patterns. Here are some smart habits to follow after consolidating your debts:

1. Stick to a budget

Plan your spending carefully to avoid taking on new debt.

2. Avoid new credit unless necessary

Focus on repaying your consolidated loan before adding more liabilities.

3. Set up autopay

Automate your EMI payments to avoid missed deadlines and late fees.

4. Track your credit score

Regularly monitor your credit health to stay on top of any changes.

5. Celebrate milestones

Mark repayment achievements to keep yourself motivated and focused.

By following these tips, you’ll make sure your debt consolidation truly pays off, helping you stay financially healthy long after your new loan begins.