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Should you avail of more than one Personal Loan?

second personal loan

At times, a single loan may not be enough to meet personal needs and you may require a second one. Here are answers to some questions you should know out before applying for a second loan.

Can you get a second personal loan?


Yes, an individual can avail of more than one personal loan. Similar to the first loan, an individual will have to meet the eligibility requirements of the second loan set by the lender. Loan providers consider several factors, such as your existing loans and current income before approving loan applications. If you’re already repaying a personal loan, a lender will carefully analyse your repayment capacity before approving new applications. If the lender finds a reason to believe you will be unable to repay two loans, the loan application could be rejected.

Should you avail of your second personal loan from another lender?


Approaching a different lender for the second loan can seem like a smart move. However, it won’t help your approval chances if:

  • You do not meet the eligibility requirements of the personal loan
  • You have existing repayments

Both - your existing lender as well as your new lender, will look at your repayment capacity and income to determine your eligibility for a second loan.

Should you approach your existing lender?


Approaching your existing lender with a new financial requirement is usually recommended. You get to negotiate better terms based on your repayment history and credit score. You may also get to borrow funds as per your needs at competitive personal loan interest rates.

What’s the alternative to a second personal loan?


A top-up is a provision that lets you add a certain amount to your existing home loan amount. With top-up loans you don’t need to approach another lender for the second loan. Some lenders will also let you combine your previous loan with the top-up loan or treat them both as separate loans. The value of your top-up loan entirely depends on your eligibility. The lender will take into account factors such as your credit score, current liabilities, and income, before approving the loan.

While debating whether to go for a second loan, analyse the factors contributing to your eligibility well to make the right decision. You can easily apply for a personal loan online at your comfort.

 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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