There’s no doubt that personal finance is one of the most convenient ways to meet any immediate financial commitments. Thanks to its easy availability, instant approval, and easy eligibility terms, it can be your lifesaver during financial emergencies. But can you take two personal loans at the same time? The simple answer is yes.

Although taking on more debt while servicing one loan is not recommended, there can be unexpected expenses. In such cases, you can opt for a second personal loan. However, there are multiple factors that you must consider before taking this step. Let’s look at the different factors affecting your eligibility for a second loan.

Credit score

If you don’t possess a decent CIBIL score, most lenders might not be willing to offer you a second loan. Or, you may find it challenging to get one at a competitive personal loan interest rates. So, before you apply, make sure your credit score is ideally above 700.

Debt to income (DTI) ratio

The debt to income (DTI) ratio measures your debt repayment capacity and helps convince the lender of your ability to make monthly EMI payments. Simply put, it is the sum of your monthly expenses divided by your gross monthly income.

That’s why when you apply for a second loan, your DTI ratio shouldn’t be low. If more than 40% of your income is used for loan repayments, the lender will hesitate to lend you a second loan. Thus, you must check and try to improve your DTI ratio before availing of another loan.

Additional Read: How has the COVID Second Wave Impacted Personal Loan Industry

Eligibility criteria

The personal loan eligibility criteria can vary from lender to lender, including age, DTI ratio, CIBIL score, etc. So, you must check the eligibility terms of your proffered lenders and pick the one offering relaxed conditions. Moreover, the points mentioned above also affect your eligibility to a great extent. Hence, you must take all the factors into account before applying for a second loan.

Asset profile

Before taking on more debt, you should also carefully consider your asset profile. Remember, your assets should always exceed the liabilities. After all, your assets are supposed to be the cushion you fall back on when facing a cash crunch. Having a clear picture of your assets and liabilities can be an excellent way to assess how much debt you can take on.

Additional costs

Sure, personal finance is easy to avail, and you don’t even have to pledge collateral, but what about the additional costs? Remember that the cost of personal finance is not limited to the monthly EMIs only. In fact, there are several other costs you need to consider, including the processing fee, late payment fee, prepayment fee, etc.

Therefore, calculate all the charges carefully to assess the feasibility of your second loan. You can even use tools like the personal loan EMI calculator to get a precise estimate of your EMI burden beforehand.

Additional Read: Here is a List of Few Types of Personal Loans in India You Would Be Unaware About


Are you considering a second loan to finance an immediate purchase or financial requirement? Turn to Tata Capital. You can find affordable personal loan schemes that are tailored to fit your needs. Check out our offerings here.

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