Financial emergencies can occur at any time, even after you’ve taken a personal loan. There’s no point in breaking your hard earned savings for urgent expenses. You must look out for alternate ways. If you need additional funds other than the existing loan, is it possible to get a second personal loan?

Technically, you can always apply for a second personal loan. Lenders will evaluate you just like how they evaluated during the first loan. However, there are a few factors that will be looked upon

  • Lenders will look into your ability to repay the loan. For that they will consider your employment history, income, and work history
  • The lenders would check if you have a good credit score. Each lender has a specified credit score requirement for their borrowers
  • They would check your Debt-to-income ratio. DTI is the ratio of your debts to your total income. Lenders expect a DTI of less than 40%, which makes you a more desirable borrower

Your history of loan taken and your repayment track record will be carefully scrutinized

  • Even if you meet all the requirements, getting a second personal loan is not very easy
  • If you have a significant loan running
  • It’s been just a few days since you took your first loan

If there are some negative flags in your credit report

Challenges in obtaining a second loan

While applying for a second personal loan, there are multiple challenges

Sanctioning loan is entirely at the discretion of the lenders. As mentioned, they will look into a few factors as mentioned above. They will deny your loan application, if they think you lack the capacity to handle two loans simultaneously

Taking multiple loans can potentially affect your credit score. Since you will have more EMI commitments, your DTI ratio would increase and getting loans in the future could get much harder.

 Alternative solutions

You need not get disheartened by the fact that you are unable to secure a personal loan. There are several other alternate ways that you could try to get a personal loan and meet your requirements.

Top up Loan – You can simply top-up an existing loan if you require additional funds from the same lender. It spares you from paying additional interest charges by enhancing your credit limit on your existing loan

Debt Consolidation – You can combine your loans into a single loan with relatively lower interest rates. To carefully plan your monthly budget, you need to wisely choose a lender that fits your terms

Apply with a co-applicant – You can enhance your chance to get a second loan by applying with a co-applicant with a good credit score and an excellent track repayment record. The lenders would consider the track record of your co-applicant and take a call to apply the loan

Apply with NBFCs – Banks have stringent repayment terms for all types of loans, whereas NBFCs have relaxed rules. There are hundreds of NBFCs in the market; you can apply for personal loan at any of them.

What are the drawbacks of getting a second personal loan?

There might be some drawbacks even if you apply for a second personal loan. Here are a few issues that you must be careful about

An increase in your debts is always a big risk. Having to manage two loans simultaneously, may interfere in your regular spending. Make sure you have sufficient income to meet the second EMI obligation

Taking a second loan would reduce your credit score. Every person is allocated a Credit Utilization ratio, which indicates how much of your credit limit that you are actually using. Your creditworthiness may suffer, if your CUR ratio is high

By having multiple loans, you always run a risk of getting stuck in a debt trap. If you are unable to meet the repayment terms properly, you could incur penalties and late fees for the loan which could further affect your credit report. This would tighten your chances to get a personal loan


Taking out a second personal loan can be a viable option if you have a clear and necessary purpose, favourable loan terms, and a solid repayment plan. However, it’s crucial to thoroughly assess your financial health, consider the long-term implications, and explore alternative financing options before proceeding.

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