Can You Apply For Multiple Personal Loans At The Same Time?
A personal loan can help you to get rid out of a financial crunch. Whether it is for business needs or personal requirements, consumer finance can come in handy when you have a financial emergency. However, one may need to opt for more than one PL simultaneously for different reasons. So, let’s explore if it is possible to apply for multiple loans at the same time or not?
Well, yes, it is possible. If you earn the right amount of monthly income and you think that you are enough financially stable and responsible to make repayment of these finances within the stipulated time period, then opting for multiple PL is definitely a good option.
However, there are a few pros and cons of applying more than one consumer finance which you need to be aware of to make the best of situation.
Pros of Applying For Multiple Finances At Once
Following are the pros of having more than one consumer loans:
One of the main personal loan benefits is that it gets quickly approved by the lender if you meet the eligibility criteria requirements pre-decided by the respective bank or financial institution.
If there is an unannounced financial crisis then opting for multiple finances can provide you the flexibility to tackle all such emergency situations with ease. As the finance amount gets quickly disbursed into your bank account once you meet all the minimum requirements.
Credit Score Improvement
If you have a steady source of income and you are enough capable of repaying multiple finances on time, then opting for more than one PL can help you to maintain a good credit score.
Flexibility in Financing
Multiple finances simply mean multiple funding sources. This ultimately provides you the access to revolving finance. Thus, you can make smaller payments regularly.
With multiple personal finances, you can have the accessibility of funds to meet your various personal or business needs.
Cons of Applying For Multiple Loans At Once
The above-mentioned personal loan benefits depict that applying for multiple lines of credit is a great idea. But as 2 sides of the same coin, there are also some cons associated with it and they are as follows:
Bad Credit Score
What most of the people usually don’t understand is the fact that applying for more than one PL simultaneously to several banks can significantly affect their chances of getting the money when they need the most.
Reason being, all the leading banks and financial institutions refer to the credit score of the applicant from the AECB. When you apply for multiple PL to several banks, it is reflected in the credit report and your credit score takes a hit if the lender rejects your PL application.
Make It Difficult To Avail Finances in Future
Once your PL application is rejected by the lender, your credit score dips further making it very difficult for you to avail loan at a time when you need the most.
High Interest Rate
Before offering you PL, lenders consider your repayment history and credit record. If in case more than half of your monthly income is going towards paying off your debts then lenders see you a high risk applicant. Thus, they might reject your application or even if they ready to sanction you a credit, they might offer you a high personal loan interest rate.
Yes, it is possible to apply for more than one consumer finance simultaneously. But keep in mind that applying for multiple loans at once could take a significant toll on your credit score as well as increase your debt-to-income ratio. This, it can ultimately make to tough for you to opt for other credits in the future. Beware of over borrowing as it can also lead to unaffordable EMIs as well as a cycle of debt.
This does not mean that opting for more than one PL is always a bad idea. If you genuinely need additional funds to meet your various monetary needs, and you can afford to pay EMIs on time or you have paid some of your original finance already, then apply for multiple loans is a good option for you.