Is a credit score needed for a debt consolidation loan?

A debt consolidation loan as the name suggests consolidates all debts into a single loan. People often resort to debt consolidation when burdened with more than one loan or multiple loans. You must be wondering amidst already existing loans, taking up an extra loan is not the right move. Think! When a single loan is capable of warding off the financial burden then why struggle with individual loans! This is absolutely a safe loan option to combine all debts into one and feel free of recurring debts.

Many borrowers hesitate to consider the need for a credit score while applying for a debt consolidation loan. A credit score is a numeric parameter set by the credit bureaus in India. It confirms a borrower’s creditworthiness in terms of timely repayment of debts and zeroes default accounts. Hence, when it comes to a debt consolidation loan mostly a credit score is considered for approval. However, it may vary from lender to lender.

A debt consolidation loan carries the load of various other loans which often makes the loan amount heavy. Hence, for safety reasons lenders do confirm the credit score to approve debt consolidation loans. A high credit score helps in instant approval while a low credit score can create difficulties in loan approval.

Besides the credit score, borrowers can use the personal loan eligibility calculator to confirm the approval status before applying for the debt consolidation loan. The loan eligibility calculator confirms details such as – employment status, EMI obligations currently, if any, monthly income, and loan tenure. Once you fill in these details, the eligible loan amount, loan EMI, and maximum loan tenure will be visible and accordingly, you can make or break the decision for a debt consolidation loan. Rejection, delays, and cancelled approval status can affect credit scores. So, it is advisable to check the loan eligibility status in advance.
 

Documentation and Eligibility Criteria for Debt Consolidation

The online instant loan process has made it simple for the borrowers to get personal loans with fewer formalities. The easy loan documentation process may urge you to borrow a personal loan for debt consolidation at the earliest.

Know the Eligibility Criteria Before the Loan Application

 

• Duly filled and signed application form
• Aadhar Card/PAN for E-KYC verification
• PAN Card for a financial background check, specifically credit score
• Company’s address and professional details
• Residence proof that includes submission of Aadhar card/Utility bills
• Last 6 months bank statement as an income proof

 

Other Mandatory Parameters for Debt Consolidation Loan Approval

 

• The borrower must be a citizen of India
• The borrower must be in an age limit of 21 - 58 years
• The borrower should reflect work stability in the professional profile
• The borrower should earn a minimum of 15,000 per month

 
Hero FinCorp, a secured personal loan app in India, is an easy-to-use personal loan app on the Google Play Store. It is highly recommended for debt consolidation loans that are generally approved on a single working day. Individuals seeking urgent funds can register and apply with the personal loan app for a quick personal loan up to Rs 1.5 lakhs without any physical documents or collateral.