Can You Have Multiple Personal Loans From the Same Bank?

Yes, one can have multiple personal loans from the same bank in India, but the exact rules vary from lender to lender. But this comes with a condition: only if your credit history, financial profile, and previous loan activity are clean, then the same lender may provide you with multiple personal loans. You need to meet the eligibility criteria of the bank offering the personal loan to the borrower. Moreover, taking multiple personal loans from the same lender is a core concept in banking. In this blog, we will understand this concept in a detailed manner. 

Key takeaways: 

1. Borrowers are permitted to hold more than one personal loan with the same bank.
2. The lender will assess various aspects, including the DTI ratio, credit history, financial profile, etc. 
3. One needs to meet the eligibility criteria of the bank to get the personal loan, as they vary from bank to bank. 

What are the advantages of taking multiple personal loans from the same lender? 

There are several benefits of taking a personal loan from the same lender in terms of the verification process, paperwork, etc. 

Here are the advantages of taking multiple personal loans from the same lender:

• Quicker loan processing: If you already have a relationship with the lender, they may already have your basic details and previous loan records. This can make the process of applying for another personal loan quicker and more straightforward.
• Less hassle with documents: You may not have to go through the entire documentation process again. Depending on the lender and whether your details are still up to date, some of the information you submitted earlier may already be available with them.
• Potentially better loan offers: Existing customers with a good repayment history may sometimes receive more attractive offers, such as a competitive interest rate or reduced processing charges. The actual terms, however, depend on the lender’s policies and your eligibility.
• Everything in one place: Managing several loans can be easier when they are all with the same lender. You may be able to check your outstanding amount, EMI details, and repayment status through the same mobile banking app or online account.
• Easier to keep track of repayments: Having loans with one lender can make your monthly finances a little simpler to organise. Instead of dealing with different lenders and their respective payment systems, you have fewer accounts and platforms to keep track of.
• Fewer applications with different lenders: If you need additional funds, staying with your existing lender can mean you don’t have to apply to several new lenders. This can help you avoid unnecessary credit enquiries, although the existing lender may still check your credit profile before approving another loan.

Hence, these are the advantages of getting multiple personal loans from the same lender. 

What eligibility criteria do banks provide to take multiple personal loans? 

Different banks provide different eligibility criteria for people to take multiple personal loans. Every bank has its own eligibility criteria for borrowers to take personal loans. 

Here are the eligibility criteria of banks providing multiple personal loans: 

3. HDFC 

• Allowed Employers: You must be working for a private limited firm or a public sector body (including central, state, or municipal government agencies).
• Age Range: Applicants need to be anywhere between 21 and 60 years old.
• Work History: You should have at least 2 full years of total work experience, with a minimum of 1 continuous year with your present company.
• Take-Home Pay: Your net monthly earnings must be at least ₹25,000.
• DTI ratio: below 40%
• Credit score: 750 or above

Hence, these are the eligibility criteria for taking a personal loan and multiple personal loans. 

What factors do lenders consider when approving multiple personal loans? 

There are several factors lenders consider when approving multiple personal loans; this can vary from lender to lender. 

Here are the factors lenders consider before approving multiple personal loans: 

• EMIs compared with income: Your existing monthly payments are compared with what you earn. If a large part of your income is already going towards EMIs, getting another loan may be difficult.
• Loans you already have: The lender can see your ongoing loans and other credit commitments. Having several repayments at the same time may work against your application.
• Payment history: Paying your existing EMIs regularly is important. A history of timely payments, particularly during the past year, can help.
• CIBIL score: An excellent credit score is generally considered favourable. Applying for several loans around the same time can also lead to multiple credit enquiries.
• Regular income: Lenders are more comfortable when your salary or business income is steady and sufficient to cover your repayments.
• Time between applications: Depending on the lender, you may have to wait for a certain period after taking one loan before applying for another.

Hence, these are the factors lenders consider when approving multiple personal loans. 

What are the major disadvantages of taking multiple personal loans from the same lender? 

There are certain disadvantages of taking multiple personal loans from the same lender in terms of your financial profile. 

Here are the disadvantages of taking multiple personal loans from the same lender: 

• Monthly payments can pile up: More loans mean more EMIs to pay every month. This can put pressure on your budget and leave you with less borrowing capacity later.
• Keeping up with EMIs gets tricky: When every loan has its own payment date, it is easy to lose track. Missing even one payment could result in extra charges.
• You may borrow beyond your means: Having access to several loans can make it tempting to take on more debt than you actually need. If the EMIs become difficult to afford, keeping up with repayments can become a problem.

Hence, these are the disadvantages of taking multiple personal loans from the same lender. 

Bottom line: 

As a borrower, it is absolutely possible to take multiple personal loans from the same lender. But one needs to keep the previous loan track record clean, maintain a good credit score, have no missed EMIs, etc., as the lender can assess all these factors, including the eligibility criteria, which can vary from one lender to another. Taking multiple personal loans from the same lender brings several benefits in the form of less paperwork, less documentation stress, etc. Whereas, it also brings certain cons in terms of EMI overload, financial stress, etc. Hence, taking multiple personal loans from the same lender is a choice, and you can also approach other lenders.  

FAQs:

Is it necessary to take multiple personal loans from the same lender? 

No, a borrower can approach multiple lenders to take multiple personal loans. 

Is the process the same for all banks to apply for a second personal loan? 

No, the process is not the same for all banks in India to apply for a second personal loan. The steps and approach may vary from one bank to another. 

Does HDFC Bank provide multiple personal loans to people at the same time? 

Yes, HDFC provides the option for multiple personal loans to people. One needs to meet the eligibility criteria and other aspects to meet the approval for multiple personal loans. 

Can taking multiple personal loans from the same lender bring benefits? 

Yes, taking multiple personal loans from the same lender can bring benefits in terms of less paperwork, less documentation complexity, no hindrance to the other loans, etc. 

Why do people take multiple personal loans from the banks? 

If taking one personal loan is not enough to cover the financial gaps, then people often choose to take another personal loan to fulfil the complexities. 

What are the major cons of taking multiple personal loans from the same lender? 

The cons of taking multiple loans from the same lender are the burden of EMIs, a higher DTI ratio, more financial stress, etc. 

Does taking multiple personal loans help in building the credit score? 

It depends completely on how you handle the multiple personal loans. Initially, it will lower the credit score due to hard enquiries. Missing the EMIs due to higher financial stress can impact the credit score too. 

Can I get multiple personal loans from the same bank at the same time? 

Yes, you can get multiple personal loans from the same bank at the same time, but it totally depends on the bank's policies and limitations. 

How many times can I get a personal loan from the same bank? 

There is no official or standard margin for banks to justify how many times they can provide personal loans to people. In fact, this can vary from one bank to another. 

Does your repayment history of an existing loan in the bank affect a personal loan application in the same bank? 

Yes, it does affect the personal loan application in the same bank, but there are also other factors the lender will consider for the assessment.