Unexpected financial occurrences might happen at any time, even after you’ve taken out a personal loan. What happens if an unanticipated occurrence necessitates more financing while you are currently repaying a personal loan? You could be considering asking for a new loan from a different lender because there are situations when one loan may not be sufficient to meet a personal need. You must examine the elements that determine your eligibility for the second personal loan in addition to arguing whether it is wise to apply for a second loan or not.
One of the best methods to pay for anticipated and unforeseen expenses is with a personal loan. Personal loans can come in handy in a variety of situations, including medical emergency, child’s education, travel, and weddings. However, it’s also conceivable for one of these unforeseen financial occurrences to happen after you’ve already taken out a personal loan. Is it feasible to obtain a second personal loan under such circumstances? If so, will the second loan’s eligibility requirements be the same as the first one? Here is everything you need to know about taking a second personal loan. Let’s look at it.
Can you get a second personal loan
Yes is the clear-cut response. A person is permitted to obtain many personal loans. But in order to get approved for the loan, just like the previous one, you must meet the lender’s eligibility standards.
Before accepting personal loans, lenders take into account a number of variables, including your present income and any outstanding liabilities. As a result, the lender will carefully assess your ability to repay any existing Personal Loan before approving any more Personal Loans from you. Your loan application can be turned down if the lender has any reason to assume that you won’t be able to pay back two loans.
Eligibility to obtain second personal loan
Repaying capacity of the borrower
Lenders want to make sure that a borrower has the ability to repay the loan before they give them money. Even if a borrower has a strong credit history and score, their variable income disqualifies them from receiving a loan. The size of the loan is heavily influenced by the income. This is crucial, particularly if you want to apply for a second loan.
Debt to income shouldn’t be higher than 50%. Your total debt, which includes the second personal loan you’re requesting, shouldn’t be greater than half of your monthly salary. It is quite unlikely that you will receive additional credit if it does.
Credit score of borrower
Let’s take a look at a different scenario in which you earn a good living, already have a personal loan, but your credit is bad because of past financial mistakes. In this instance, eligibility is heavily influenced by past credit behavior and how it affects the credit profile. The new loan eligibility is negatively impacted by erratic credit behavior, such as “settled” and “written-off” accounts.
When can you apply?
You must be aware of the deadline for applying for a new loan while keeping in mind that a personal loan is active and has strong eligibility requirements. After acquiring the first loan, the borrower must at least wait for six months. Shortly after repaying the first loan, you can be rejected outright if you apply. Hard inquiries and rejections might significantly lower your credit score.
Second personal loan from another lender
It could seem like a good idea to apply for a second loan from a different lender. However, it makes no difference whether you approach the same or a different lender if you do not fulfill the personal loan eligibility standards since you are already repaying a previous loan. Your income and ability to repay the loan will be taken into account by both your new lender and your current lender when determining whether you qualify for a second loan.
Top-up loan
Lenders are aware that certain borrowers may need more than one personal loan to handle an urgent financial situation. As a result, some of India’s best lenders now provide top-up loans. A top-up loan, as its name suggests, enables you to raise the credit limit on your current Loan. You can obtain a top-up loan instead of going to a different lender for a second loan.
Some lenders additionally permit you to regard the top-up loan and your prior loan as separate loans or to combine them. Can I acquire a Personal Loan with a Top-Up Loan? Your eligibility will determine everything. Before approving the loan, the lender will take into account variables including your income, present debts, and credit score.
Alternative Methods
Based on your strong repayment history, the majority of banks and NBFCs now offer top-up loans on the current personal loans. As opposed to starting over with a new loan application, it can be a realistic alternative. This might also prevent hard inquiries and loan denial. However, the top-up loan could only be used after the lock-in period was up.
Short-term loans from online lenders are simple to get if you only need a little loan amount. Some lenders may advance you a portion of your monthly salary at a modest interest rate.
The greatest alternatives to a second personal loan are secured loans, including mortgages on homes or gold.
Conclusion
If you match the lender’s eligibility standards, you may be able to obtain multiple Personal Loans. If you are currently making loan payments, the rules become more stringent. A second loan is ultimately an additional duty that can drain your bank account. When deciding whether to apply for a second personal loan, take into account the effect on your income and monthly expenses. Finding a lender that provides a top-up loan facility is a superior solution if you want to easily meet your increasing financial need.
Since you are already a client of the lender, getting a top-up on a personal loan from them would make the documentation procedure simpler as well as the processing and disbursement of the loan.
