If you’re juggling multiple personal loans, credit card outstanding, app-based loans, or payday loans, chances are someone has told you: “Just consolidate everything into one loan and pay a single EMI.” It sounds simple. Unfortunately, it isn’t always possible — and understanding why can save you from chasing an option that may not work for your situation.
The Common Misconception About Loan Consolidation
Many borrowers assume that all outstanding loans — regardless of type, lender, or repayment history — can automatically be merged into a single new loan. In reality, consolidation is only available through select NBFCs, and it’s subject to your eligibility and overall loan profile. Factors like your credit score, income stability, existing loan mix, and repayment track record all play a role in whether a lender will even consider consolidating your debt.
Why Payday Loans Complicate Consolidation
Payday loans are often the biggest roadblock. Their short tenure, high interest rates, and frequent renewal patterns make lenders view them as higher risk — which means many NBFCs are hesitant to include payday loans in a consolidation offer. If a significant portion of your debt is payday-loan based, straightforward consolidation may not be on the table at all.
What If You Own Property?
If you have property, a property-backed loan (loan against property) could be one possible route to pay off multiple smaller debts and replace them with a single, often lower-interest, secured loan. This depends on your eligibility, the property’s value, and the lender’s specific criteria — it’s not a guaranteed fallback, but it’s worth evaluating.
What If You Don’t Have Property? Consider Debt Restructuring
For borrowers without property to leverage, Debt Restructuring is often a more realistic path forward than trying to force a consolidation that doesn’t fit your profile.
Debt restructuring isn’t a single loan product — it’s a structured process that involves a full review of your financial position, including:
Monthly salary/income — what you’re actually working with
Fixed monthly expenses — rent, utilities, essential costs
Existing EMIs — what you’re currently committed to paying
Active and outstanding loan accounts — a full picture of every debt
Which accounts can remain active — loans that are manageable as-is
Which accounts may need to be paused and worked toward closure — debts that need a different strategy, such as negotiated settlement or a structured payoff plan
The goal isn’t to erase debt overnight — it’s to create a realistic, sustainable path to becoming debt-free based on what your income can actually support.
There’s No One-Size-Fits-All Answer
Every borrower’s situation is different. The right approach — whether that’s consolidation through an NBFC, a property-backed loan, or a full debt restructuring plan — depends entirely on your individual income, expenses, existing loans, and credit profile. What works for one person’s debt situation may not work for another’s.
If you’re unsure which path applies to you, it’s worth getting a professional assessment before committing to any single option.
Get a Personalized Assessment from Shivafinz
At Shivafinz, we review each case individually — income, expenses, EMIs, and loan accounts — before recommending a path forward, rather than offering blanket consolidation promises that may not apply to your situation.
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