Can we take two personal loans at a time: All you need to know

Reviewed by: Sudesh Shetty

  • Updated on: 29 Jan 2024
  • Published on: 12 Jan 2024
Can we take two personal loans at a time: All you need to know

‘Can we take two personal loans at a time?’ is a common question you may have when you need substantial financing. The good news is that you do so. These additional funds allow you to handle various unexpected or planned expenses like:

  • Medical emergencies
  • Payment of utility bills
  • Making a down payment for a car
  • Paying your child’s tuition fees

Read on to know more about getting two personal loans simultaneously, important things to consider and alternative options.

A guide to multiple personal loans 

Once you qualify for them based on the terms set, you can get 2 personal loans at the same time from different lenders. Usually, your second application for unsecured credit may be approved by the same financial company. Further, certain conditions may apply, such as paying a specific number of EMIs on your first loan before you get your second loan. 

Lenders consider the following to assess your repayment ability no matter how many loans you apply for:

  • Credit score
  • Income and employment
  • Age
  • Existing loans
  • Credit utilisation ratio
  • Debt-to-income ratio

Things to consider before opting for a second personal loan

Here are some points you must consider before getting another loan:

Impacts Your Creditworthiness

When you send in your application for multiple loans one after another, your CIBIL or credit score reduces. This is because lenders run a hard inquiry to check your score whenever you send your loan application. 

This helps them assess your repayment ability and reject applications that carry higher chances of default. Multiple applications within a short span of time can impact your creditworthiness and thus decrease your score. 

DTI Ratio Goes Up

As you may know, the debt-to-income ratio refers to the amount of debt you have in comparison to your income or earnings. Banks or NBFCs check this ratio before approving your second loan application. 

Since you have existing debts, securing another loan will increase your debt obligation and thus increase this ratio. This may lead a rejection of your application. Try to keep your total DTI ratio at less than 40% of your income to increase the chances of loan approval.

Can Result in a Debt Trap

The more credit you have to repay, the more you strain your income. Thus, a second loan can impact your affordability and result in delayed EMIs. This may attract late charges and penal interest, which increases your obligations even more and can lead you into a debt trap. 

Planning your EMIs beforehand can help protect you from this scenario. You must assess the following before deciding to apply for a second loan:

  • Monthly income
  • Current loans
  • Existing credit cards
  • Short and long-term financial goals

Additional Costs

Loans come with various types of costs, such as:

  • Processing charges
  • Interest payments
  • Foreclosure charges
  • Document charges
  • Late payment fees
  • Administrative charges

Before finalising your loan option, it is important to consider these charges. This can help you reduce your borrowing costs and make your loan repayment easier. A higher interest rate means larger EMIs, which can affect your finances. Remember to research and compare various lenders and choose an option with lower charges.

Wait to Get Additional Financing

If you have applied for a loan with multiple lenders or already service a large number of loans, you may need to wait to get additional loans. This is because a high number of loans show a high reliance on credit and multiple rejections can lower your score. 

This can lead to rejection of your loan application since the lender might question your creditworthiness. Therefore, limit your loan applications, or if you have recently taken up a loan, wait for some time before applying for a second loan. 

Alternative options for a second personal loan

Check out some alternatives to getting an additional loan:

  • Personal Savings: You can use your personal funds to cover financial emergencies
  • Top-Up Loan: Getting a top-up on your existing loan offers additional funds
  • Personal Loan Balance Transfer: You can transfer your balance to another lender to increase your savings and manage your loan better
  • Debt Consolidation Loan: Consolidating multiple loans into one lowers your repayment costs and makes it easier to manage the loan
  • Loan Against Securities: You can also get funds against collateral such as gold, real estate documents, vehicle papers, etc.

Choosing the right lender can help you get the funds affordably and hassle-free. With Fibe’s Instant Cash Loan, you can get up to ₹5 lakhs at nominal interest rates. You enjoy other perks like an easy online application, minimal paperwork and zero pre-closure charges. Download the Personal Loan App or log in to our website to get the funds and cover your financial needs effectively!

FAQs on Two Personal Loans At The Same Time

Can I borrow 2 loans at the same time?

With a low debt-to-income ratio and meeting the eligibility criteria, you can get two loans. 

Does having 2 personal loans affect credit score?

Multiple loans can lower your credit score since your repayment capacity decreases. Multiple hard inquiries within a smaller gap can also lead to a lower score.

Is it good to have two loans?

If you can repay it without strain, you can benefit from an additional loan to meet your needs. However, it can have some disadvantages, like:

  • Risk of debt-trap
  • Lower credit score
  • Higher debt-to-income ratio
  • Additional borrowing costs

How to apply for multiple personal loans?

You may be able to get additional loans from different lenders following the online or offline application procedures. You can also do so on relevant apps and check the eligibility criteria and other requirements before applying.


Our top picks

Can Millennial Stress be Resolved by Financial Wellness?
Finance | 3 mins read
How Organisations Can Measure the Impact of Financial Wellness Programs
Finance | 3 mins read
How Can HR help Overcome Staffing Challenges in the Digital Age?
Corporate | 3 mins read
5 Signs of A Good HR Function
Corporate | 3 mins read