The Truth Behind Taking Multiple Personal Loans

The Truth Behind Taking Multiple Personal Loans

A Personal loan can help you to come out from a financial crunch. Whether it is for personal reasons or for your business needs, a personal loan can come in handy when you need funds. Based on your needs you can avail multiple personal loans, but this requires you to tread carefully. Managing one loan is a task in itself. Yet, there can be certain urgent situations which might make you avail one more personal loan along with the existing one.

There is no set limit for the number of times you can apply for personal loans. Before you decide on taking multiple loans, you need to ask yourself – do you or your business needs the funds? Can you repay the debt on time?

For example:

If you have your own business then it is understood that capital needs can be a little tedious to handle. A disaster or an emergency can strike anytime and you might need more funds. Let’s take a look at some pros and cons for taking multiple loans for your business needs.

PROS

Quick Response

If there is an unforeseen crisis then multiple lines of credit can give you the flexibility to react quickly in times such emergency situations. You do not have to wait for days to get financing.

Credit Improvement

If you have the capacity to repay multiple loans on time, then availing multiple personal loans can speed up the process of improving your credit score.

Flexibility in Financing

Multiple loans mean multiple sources of funding. This gives you access to a revolving loan. You can make smaller payments on a regular basis.

Sense of Security

Having different sources of funding can also make you feel secure about your business.

CONS

The above benefits make it seem that multiple loans are a good way to finance your business. But as two sides of the same coin, there are also some cons attached to it. These are the question you need to ask yourself if you opt for multiple loans.

  1. Do you genuinely need that much financing?
  2. Is it in your capacity to repay multiple debts on time?
  3. Do you have the resources to do timely payments and efficiently handle multiple loans?
  4. Are you familiar with the working and handling of multiple loans?

The total number of loans you can apply for depends on your Debt-to-Income ratio and your CIBIL score. To get an instant personal loan you need to have a low DTI ratio and a high CIBIL score. You can also get an approximate amount of EMIs you will have to pay by using the Personal loan EMI calculator. This will give you an idea of your additional payments every month.

We have laid down the pros and cons of multiple loans for you. You must consider the above and only then apply for multiple personal loans.

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