09 OCTOBER, 2021

When Covid-19 suddenly attacked his family, Sumit was hit by a financial crisis. His father was seriously ill and had to be admitted to the hospital. On his friend’s suggestion, he opted for a personal loan to meet the medical expenses. The situation was gradually coming into control; however, his mother too had to be admitted due to health complications after some time. He had already exhausted the first loan and was confused if he should liquidate his investments or avail another personal loan.

It is not uncommon to face a situation where you need to take more than one personal loan to cater to various financial requirements. Let’s find out whether opting for more than one personal loan is a good idea or not. 

Can you take more than one personal loan?

Yes, you can take more than one personal loan, as there are no restrictions. But, you would need to meet the eligibility criteria like income, job stability, age, credit score, existing loans etc., to avail the second loan. While analysing your creditworthiness, if the lender has a feeling that you would not be able to manage two loans, they can reject your application.

You can apply for personal loan again with the same lender or look for other lenders to get better interest rates or deals. However, any lender would consider your repayment capacity and income while processing your loan application.

Impact of having more than one personal loan

Availing more than one personal loan can provide you with additional funds to fulfil your needs. However, it can also lead to over-borrowing and put pressure on your monthly budget and so, might not be financially viable. Also, availing two loans can increase your debt to income ratio leading you into the high-risk borrower category.

Should you take another personal loan?

You can avail more than one personal loan if you meet the eligibility criteria and have the financial stability to repay both timely. However, you might face issues in getting approval for a second loan as the eligibility gets stringent when you are already servicing one personal loan. A better alternative could be to avail a top-up loan. With a top-up loan, you increase the credit limit of your existing personal loan. You can apply from your existing lender or look for lenders who offer top-up loans. It could be easier to avail a top-up personal loan from your existing lender as they already have your documents and are aware of your credibility. 


Though he had to spend a considerable amount of money and avail two loans, Sumit's parents recovered quickly and were saved. Thankfully, he had a well-paying job and good repayment capacity that helped him comfortably repay the EMIs for both loans. However, if you plan to avail more than one loan at a time, ensure that you can repay both timely and leave no chance for default. It would be best to check your affordability with a personal loan EMI calculator and then proceed.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.