Can you take a second personal loan while repaying the first? Here's what to know

Personal loans are immensely popular financial tools for addressing diverse needs and aspirations of borrowers such as medical emergencies, education, home reconstruction etc. Still, what happens if you have one personal loan already on your name and need another?

The answer for the same lies in your financial profile, credit score, repayment capacity and lender policies. This write-up is dedicated towards discussing the same in detail.

Eligibility criteria for multiple personal loans

Yes, it is completely possible to apply for and take out a second personal loan while you are still repaying the first one. Still, approval for the same depends on several crucial factors:

1. Credit score: To apply for the second loan, you need a high credit score. It should typically be above 750. This will boost your chances of securing multiple loans, as it reflects fair and honest credit behaviour and creditworthiness on your part along with a consistent repayment history.
2. Debt to income ratio (DTI): This ratio needs to be lower than 40%. As it shows that you are not overly reliant on debt and can manage additional debt responsibly.
3. Clarity on existing loan obligations: Now if you are someone who already has significant financial obligations, repayment EMIs pending then lenders may hesitate to approve your loan application. As they will see you as a high risk borrower, until and unless you can demonstrate strong repayment ability.
4. Lender terms, policies and conditions: Different lenders follow unique data driven criteria for approving multiple loans. Some may offer more flexibility if you have had a long relationship with them. That is why it is important for you to discuss your issues with them and explain to them and convince them as to why you are looking for this second loan?

Steps to manage multiple loans

If you are considering applying for a second personal loan, they you should follow the given steps diligently to ensure seamless processing and management:

1. Take a pen and paper and assess your financial capacity by calculating your expenses, income and current debt obligations.
2. Focus on your credit score, check it regularly and try to improve it further. Keep a tab on your credit utilisation ratio as well.
3. Use online tools such as personal loan EMI calculators to determine how much money you can borrow in a responsible manner.
4. Plan and create a strategic repayment structure to avoid financial strain later on.
5. Speak to experts, discuss your financial problems for professional guidance.

According to RBI data, personal loan growth in the country has slowed to 14.2% in Jan 2025, hit by weak demand for vehicle and credit card loans. In such a scenario, taking out a second personal loan becomes a little more complicated and comes with both pros and cons.

On your part it requires sensible planning. Do ensure that your creditworthiness, commitment to repayment and overall integrity as a borrower aligns with the requirements of your lender before applying for the loan. This way you will bring yourself in the best possible position to secure a second loan while you already have one.

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