Can You Get a Second Personal Loan

Unexpected financial emergencies can crop up anytime. What if you are already repaying a Personal Loan, but an unexpected requirement of funds comes up?  Is it possible to get another Personal Loan in such circumstances? Read this blog post to find out.

The Basics of Applying for Multiple Personal Loans

Applying for more than one Personal Loan is possible, but certain rules apply. Most lenders, including ICICI Bank, allow you to apply for a second Personal Loan only after 30 days from the disbursement of the first loan. This ensures proper repayment tracking is completed before granting another loan. So even if you meet the basic requirements, your current financial commitments can influence the approval of your loan application.

While there’s no legal limit on the number of Personal Loans for which you can apply, each application can affect your credit score. That’s because banks perform a credit check (called a hard inquiry), which may temporarily adversely affect your credit score.

Another key factor is your Debt-To-Income ratio (DTI). This ratio compares your total monthly debt repayments to your monthly income. If your DTI is too high, lenders may see you as a risky borrower and decline your loan application.

Can You Get a Second Personal Loan?

The simple answer is yes. An individual can avail of more than one Personal Loan. But just like the first loan, you will have to meet the eligibility requirements of the lender to get approval for the loan.

Lenders consider several factors like your current income, existing loans, etc. before approving your Personal Loan application. So, if you are already repaying a Personal Loan, the lender will carefully analyse your repayment capacity before approving the next Personal Loan. If the lender has any reason to believe that you will be unable to repay two loans at the same time, your loan application could be declined.

How About Taking the Second Personal Loan from Another Lender?

Approaching a different lender for the second loan might seem like a smart solution. But if you do not meet the eligibility requirements since you are already repaying an existing loan, it doesn’t matter if you approach the same or a different lender. Your existing lender, as well as the new lender, will consider your income and repayment capacity to decide whether you are eligible for a second loan.

The Solution? Take a Top-Up Loan

Lenders do understand that people might require more than one Personal Loan to deal with a financial emergency. As a result, some of the top lenders in India now offer top-up loans. As the name suggests, a top-up loan helps you increase the credit limit of your existing Personal Loan. This eliminates the need to approach another lender for a second Personal Loan.

Some lenders allow you to either combine your previous loan with the top-up loan or treat them as individual loans. The amount you can get as a top-up loan depends entirely on your eligibility. The lender will consider factors like your income, current loans and credit score before approving the top-up loan.

Taking More Than One Personal Loan

Taking more than one Personal Loan is a possibility if you meet the eligibility requirements of the lender. The requirements get more stringent if you are already repaying a loan. A better alternative is to look for a lender that offers a top-up loan facility, so that you can easily fulfil your increased need for money.

Eligibility Criteria for Multiple Personal Loans

• Age Criteria: Applicants must be between 20 to 58 years if they are salaried individuals and 23 to 65 years if they are self-employed individuals

• Income Requirement: A minimum monthly income of ₹ 30,000 is needed to apply

• Employment Type: Both salaried and self-employed individuals are eligible

• Work Experience: Salaried applicants must have at least 2 years of work experience

• Business Vintage: Self-employed applicants must have 2 years in the current business and at least 3 years of total business experience

• Citizenship: The applicant must be an Indian citizen with valid proof of citizenship

• Credit Score: A good credit score (700 or above) boosts your chances of approval

• Loan Amount: Depending on income and credit profile, you can apply for a loan of up to ₹ 50,00,000.

Smart Tips for Applying for Multiple Personal Loans

Here are some ways by which you can apply smartly for multiple Personal Loans:

1. Apply only when needed

Avoid taking loans for non-essential expenses. Borrow only when necessary, to avoid unnecessary debt and interest burden. Responsible borrowing helps you stay financially stable in the long run.

2. Check loan terms carefully

Always read the loan agreement thoroughly. Understand the interest rate, repayment period, processing fees and charges & penalties. Clear knowledge of the loan’s terms helps you avoid surprises and manage repayments easily.

3. Maintain gap between applications

Spacing out loan applications reduces multiple hard inquiries (credit checks) that can adversely affect your credit score. A good credit score increases your chances of approval and better loan terms. ICICI Bank offers a second Personal Loan only after a gap of 30 days from the disbursement of the first loan.

Conclusion

Taking multiple Personal Loans is required at times to support different financial needs, but careful planning is important to manage them well. Always review your budget, understand the loan’s terms and check your eligibility before applying. Borrowing smartly helps you maintain financial stability and prevents overburdening your monthly income with repayments.

Taking a top-up loan from the same lender is a good solution, since the documentation process is easier and loan processing and disbursement are quick and easy since you are already an existing customer of the lender.

Click here to apply for top-up on your Personal Loan from ICICI Bank.

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