Introduction to Debt Repayment Loans
In 2025, debt repayment loans help individuals consolidate high-interest debts into manageable payments. Loanpao explores financing options to reduce financial stress and improve credit health.
Types of Debt Repayment Loans
Balance Transfer Loans
Loans up to ₹15 lakh at 10–14% p.a. to transfer high-interest credit card or loan balances to a lower-rate loan.
Personal Loans for Debt Consolidation
Unsecured loans up to ₹10 lakh at 12–18% p.a. to combine multiple debts into a single EMI.
Top-Up Loans
Additional loans up to ₹5 lakh at 11–16% p.a. on existing loans for debt repayment or other needs.
Comparison of Debt Repayment Loan Options
Key financing options for debt repayment in 2025:
| Loan Type | Loan Amount | Interest Rate | Tenure | Key Feature |
|---|---|---|---|---|
| Balance Transfer Loans | Up to ₹15 lakh | 10–14% p.a. | 1–5 years | Lowers interest on existing debt |
| Personal Loans for Debt Consolidation | Up to ₹10 lakh | 12–18% p.a. | 1–5 years | Combines multiple debts |
| Top-Up Loans | Up to ₹5 lakh | 11–16% p.a. | 1–4 years | Adds to existing loan |
Note: Rates and terms vary by lender and credit profile.
Benefits of Debt Repayment Loans
These loans offer:
- Lower interest rates compared to credit card debt (18–36% p.a.).
- Single EMI for easier debt management.
- Potential to improve credit score with timely repayments.
- Flexible tenures to suit repayment capacity.
- Quick disbursal for urgent debt consolidation needs.
Tips for Securing Debt Repayment Loans
Improve your approval chances:
- Check Eligibility: Ensure a stable income to demonstrate repayment ability.
- Compare Rates: Use Loanpao to find lenders offering the lowest interest rates.
- Collateral Option: Offer assets for secured loans to reduce rates.
- Debt-to-Income Ratio: Maintain a low ratio to boost approval odds.
- Loan Tenure: Choose a tenure that balances EMI affordability and total interest.
Frequently Asked Questions
Loans designed to consolidate high-interest debts into a single, lower-rate loan for easier repayment.
Yes, timely repayments can boost your credit score by reducing credit utilization and showing financial discipline.
Personal loans for debt consolidation are typically unsecured, but secured options may offer lower rates.
Credit card balances, personal loans, and other unsecured debts can typically be consolidated.
Loanpao connects you with lenders, provides EMI calculators, and offers guidance on consolidation options.