As the name implies, a debt consolidation loan combines all debts into a single loan. When people have more than one loan or many debts, they frequently turn to debt consolidation. You may be asking why, with so many debts already outstanding, taking out another loan is not the best option. Think! Why fight with individual loans when a single loan is capable of alleviating financial stress? This is an extremely safe financing alternative for consolidating all bills into one and feeling debt-free.
When applying for a debt consolidation loan, many consumers overlook the importance of a credit score. In Nigeria, a credit score is a numerical parameter determined by credit bureaus. It verifies a borrower’s creditworthiness by removing default accounts and confirming timely debt payments. As a result, while applying for a debt consolidation loan, a credit score is usually taken into account. It may, however, differ from one lender to the next.
A debt consolidation loan carries the burden of several previous loans, resulting in a large loan amount. As a result, lenders check credit scores before approving debt consolidation loans for safety reasons. A good credit score facilitates rapid acceptance, but a low credit score might make loan approval more challenging.
Borrowers may use the personal loan eligibility calculator to validate their approval status before applying for a debt consolidation loan, in addition to their credit score. The loan eligibility calculator verifies information including employment status, existing EMI responsibilities, monthly income, and loan tenure. Once you have entered these facts, the qualifying loan amount, loan EMI, and maximum loan term will be displayed, and you will be able to decide whether or not to take out a debt consolidation loan. Credit ratings can be affected by rejection, delays, and cancelled approval status. As a result, it is a good idea to double-check your loan eligibility ahead of time.
Documentation and Eligibility Criteria for Debt Consolidation
Borrowers may now receive personal loans with fewer procedures thanks to the online rapid lending process. The simple loan documentation procedure may tempt you to take for a personal loan to consolidate your debts as soon as possible.
Know the eligibility criteria before the loan application:
- Application form that has been completely filled out and signed.
- E-KYC verification requires an BVN Card.
- For a financial background check, especially a credit score, a BVN Card is required.
- Address and contact information for the company
- Submission of BVN card/utility bills as proof of residence is required.
- As evidence of income, a bank statement from the last six months is required.
Other mandatory parameters for debt consolidation loan approval
- The borrower must be an Nigerian national.
- The borrower must be between the ages of 21 and 58.
- The borrower’s professional profile should demonstrate employment stability.
- A monthly income of at least N5,000 is required of the borrower.
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