Personal loans are easily accessible these days. You can now apply for an instant personal loan from the comfort of your own house. All you need is a good internet connection and a phone or a tablet. Most lenders these days have their online websites through which you can do your personal loan application. This removes the pain of visiting the lenders’ branches with a huge pile of documents. Online personal loans have made it easier for people to take personal loans when they need immediate funds.
A personal loan is a no questions asked, unsecured loan which requires no collateral. This raises a question as to how often can one take a personal loan. The expenses of a high standard of living are going to increase day by day, but how many times can you opt for personal loans to incur these expenses?
You may have taken a loan for some financial crunch or a purchase. Yet there is one more additional expense which has come up which cannot be covered under the current personal loan. You can apply for a personal loan as many times as you want. But whether or not you get the loan approved from the lender is the real question here.
There is no limit on taking multiple personal loans but it all depends on your repayment capacity and also your credit score. You need to keep a tab on your debt-to-income ratio which needs to be as low as possible.
We still do not think of personal loans as a useful financial instrument, as much as we can. But there are a few advantages which can work in your favour by taking personal loans, given that you have a good credit score.
Here some advantages of availing a personal loan and how it can help improve your credit score.
- A Personal loan can help you smoothen your cash flow
- If you do timely payments, then, you can also establish a good payment history which can help you increase and maintain an impressive credit score.
- Instead of just a monthly EMI, you can do multiple payments. This will help you to reduce the interest rate and also improve your credit score.
Here are a few things which you should keep in mind if you plan to take personal loans often.
- When you take back to back personal loans it might be good for a credit score, but this might also prompt a lot of inquiry on the same credit report.
- Taking multiple loans can make you come out as someone who is in a lot of debt and stuck in a credit cycle.
- Taking personal loans often means you will have monthly payments often too. This means you will owe more than you can repay.
You have the liberty to take as many personal loans you want, but we advise you to do it at your own discretion and after thorough research and knowhow of your finances. You can also calculate your EMIs for your second loan by using the personal loan EMI calculator.