Can you Have Multiple Personal LoansAs the saying goes, “human wants are never-ending” and the thirst for more is boundless. For instance, you may have taken a personal loan for your wedding and next you need funds for a vacation abroad. So, can you take one more personal loan when you already have one? Well, the answer is yes!
Yes, more than one or multiple personal loans can be taken at a time. But often it is not advisable and not a good idea to take multiple loans due to certain factors, unless very urgent to raise emergency funds. Multiple personal loans should betaken from the same lender or financial institution with the assurance of timely payment of EMIs. So that your credit report does not hit adversely.
Let’s have a brief look at the advantages & disadvantages of taking multiple personal loans at once:
Advantages of multiple personal loans
Quick approvalWhen an unexpected incident strikes demanding urgent funds, multiple personal loans can support you with the required finances to handle the situation with instant loan approvals online.
Increases your credit scoreMultiple loans if managed well with timely repayments can help to build a higher credit score. This is a good chance to increase your credit score at once with the right loan management through a personal loan app.
Flexible repayment tenurePersonal loans are flexible and can be repaid as per your convenience. So, when you opt for multiple personal loans, you have the discretion to decide the loan repayment tenure based on the repayment capacity and monthly expenses.
Fast DisbursalInstant personal loans are approved the same day of application and disbursed within 24 hours directly into the borrower’s bank account. So the urgency of funds is met of time by taking multiple personal loans.
Collateral freeAs personal loans are unsecured loans; there is no security or guarantor required against the loan amount. So, the stress of keeping your asset at stake diminishes and you can easily avail more than one loan.
Disadvantages of multiple personal loansAs per the above-mentioned ideas, multiple loans may be beneficial to some extent, but having multiple liabilities will definitely have some disadvantages of taking multiple loans:
Impacts credit scoreYour credit score can drop, if you are unable to repay your dues on time.
End up paying moreWith multiple personal loans your expenses increase and you are forced to pay multiple EMIs at a high interest rate.
Affects standard of livingWith inflated expenses; you have to forgo multiple necessary and luxury expenses, thereby dropping your standard of living.
Need to keep a track of multiple loansFor your respective loans, you need to keep an eye on all your lending cycles. Incase you miss a single repayment even for a month; your credit score may get disturbed.
Loan rejectionHaving multiple loans may not be an issue, but it could raise your debt-to-income ratio and lead to the rejection of loan applications.
How do you manage multiple personal loans?With the above-said advantages and disadvantages of multiple personal loans, it doesn’t mean you are going to get sunken in debt. With effective financial management, you can prevent debt from escalating.
- Focus on pre-closing one loan at a time
- Pay off personal loan EMIs before your monthly credit card debts, if any
- Don’t create additional credit cards and limit spending
- Opt for a debt consolidation loan to handle multiple financial needs
- Avoid taking small loans to manage monthly expenses
Hence, taking multiple personal loans isn’t an unusual affair and quite common among borrowers in the current pandemic scenario. Instant personal loans are great support helping many households to survive during the lockdown phase.