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Is it worth taking an additional personal loan?

Are you looking to settle a really urgent financial requirement by availing a personal loan? Do you need urgent funds to pay for a wedding in the family or for a vacation? Personal loans these days have become quick and easy and tend to fulfill almost all the urgent financial needs of an individual. But, availing a personal loan while you already have an ongoing personal finance scheme to your name isn’t an easy task. Getting a second personal loan from a different lender seems to be a quick and simple thing but isn’t exactly a piece of cake. 

Why will you want to avail an additional personal loan?

Customers may require additional personal loans for a variety of reasons like urgent medical expense, child’s education expense, a long-awaited vacation and other such personal reasons. Personal loans are quick and easy financial tools that help you deal with a host of urgent financial needs. These loans are generally unsecured and are sanctioned in a matter of few days, sometimes in just a few hours.

However, there are many inputs that go into a bank approving your request for a second personal loan. 

Challenges in the way of availing an additional personal loan

Banks will always review your financial ability to pay-off loans that you already have as well as those which you are planning to avail. In case a bank finds your income sufficient to pay-off multiple loans, then it will have the least hesitation in granting you another additional loan

-       A good credit history is a plus while trying to avail multiple loans. If the bank in question finds your payback history credible enough and your credit report remarkable, then a second loan for you should not take time. A good payback history means that you have been regular in paying off your debt while a good credit report is a summary of you credit history

-       While deciding on granting loan to customers, banks also look into their employment history. If, you have been employed by your current employer for a reasonable period of time then your job is considered more stable and hence loan is granted more easily 

-       Banks may want to find out the reason for which you had availed your previous loan and also the purpose for which you are seeking another fresh loan. In case, it is found that you are trying to stockpile the loan amount to start a new business or any such thing that requires massive capital input, then there are chances that your loan application will be denied.

Steps that can be taken to improve your chances of getting multiple loans

-       Get your credit scored fixed in case it is not up-to-date. Sometimes, banks do not update the score once a loan is paid off, which may result in a lower credit score. You can check your credit score and get back to the respective bank to get it updated

-       Creating a balance between secured and unsecured debt is also a good practice to follow. This will also lead to good credit history which in turn will boost your chances of availing a personal loan

-       Cite your reason for seeking a personal loan as clearly as possible so that the bank has no hitch in providing you credit