Yes, Indeed. It is possible to borrow simultaneously from two different banks.
There is a huge possibility that you’ve borrowed once, however the sanctioned amount does not meet your end. Your approved loan amount depends on a huge plethora of factors and hence may or may not guarantee an estimated amount. When you apply after an existing loan from another bank, the lending institution tends to verify your credit score and report. This will help them to track your repayment abilities. You can take up a personal loan with instant approval.
So, can we approach more than 2 banks/NBFCs?
It is quite possible to avail personal loan from 2 or 3 banks/ NBFCs together. However, it is better said than done. So the banks evaluate your repayment capacity for the EMIs on the dedicated loans? With the repayment capacity, the credit history must be thoroughly verified to gauge your financial character. Also, all the income sources are brilliantly examined to ensure that ‘your take home’ salary must be enough to pay up household chores. All financial institutions believe that only about 40 % salary should be dispersed for EMIs/installments, to maintain a decent standard of living.
To add here, you can satisfy all criteria and have multiple loans from one or many banks.
This is a common phenomenon to have a loan from another bank. When you an existing loan, the lender is interested to know all about your credit position from the rating agency. After taking all the points into consideration, the bank will take a call on whether the individual is eligible for a new loan or not.
What methodologies are used to gauge the credit standing?
- Lending institutions use FOIR (Fixed obligation to income ratio) to understand your repayment capacity. As per bank norms, an individual must limit restrict all his/her fixed commitments which includes current & existing loan EMIs. It should be equal or above 50% of the monthly income. To simplify, your pocket must have 50% leftover income to service all regular spending. An individual must have residual 50% to have a decent living and meet all monthly loan obligations/liabilities.
As an expert, we would recommend you to check your Personal Loan eligibility for quick Approval
To check your personal loan eligibility, credit rating bureau and retrieve your credit history. Let’s assume, you’ve taken a home loan! A good financial position is one where 50% of your monthly budget goes into financing your routine tasks. By the time, you apply for a second loan, the lending institution should be able to judge your next spending as EMIs. If the remaining income seems low, then banks may avoid to lend personal loans again!
To sum up, under such cases, always apply with a co-applicant to improve your repayment capacity and loan eligibility. Just ensure you find a co-applicant with an FOIR does not exceed 50% to improve chances of an additional loan application getting approved.