| Overview: When applying for another loan while already repaying one or more, lenders assess several financial indicators before approving your request. Factors like repayment history, income stability, debt-to-income ratio and credit score play a crucial role in determining your creditworthiness and borrowing capacity. |
Juggling Multiple Loans? See How Lenders Assess Your Next Move
With India’s personal loan market growing rapidly, reaching over ₹11.9 trillion in outstanding balances by 2024 (as per RBI data), many borrowers are managing multiple loans simultaneously. While taking another loan can support essential expenses or emergencies, lenders carefully evaluate your profile before approval. They examine not just your credit score but also your overall repayment behaviour, disposable income, and total liabilities.
Having an active loan doesn’t automatically reduce your chances, but each new application invites scrutiny. Knowing how lenders assess you helps in preparing a stronger loan application.
Main Factors Lenders Consider When You Already Have Loans
Before approving an additional loan, lenders review several crucial financial aspects to gauge your repayment capacity and overall creditworthiness.
1. Your Credit Score and History
Your credit score, maintained by agencies like CIBIL, reflects your past borrowing and repayment behaviour. A score above 750 significantly boosts approval chances. Lenders analyse:
- Repayment punctuality across existing loans
- Frequency of loan enquiries
- Length of credit history
| Important to Know: A single missed EMI can reduce your score by up to 50 points. |
2. Debt-to-Income (DTI) Ratio
The debt-to-income ratio compares your total monthly loan payments with your monthly income. A DTI below 40% is typically preferred by most Indian lenders.
Example Table:
| Monthly Income | Monthly EMIs | DTI Ratio | Risk Level |
| ₹60,000 | ₹18,000 | 30% | Low |
| ₹60,000 | ₹30,000 | 50% | High |
If your DTI is high, lenders may either offer a smaller amount or a higher interest rate.
3. Income Stability and Source
Lenders value steady income, whether salaried or self-employed. A consistent source of earnings indicates your ability to service new EMIs. Bank statements and salary slips provide a clear picture of financial reliability.
| What You Must Know: Lenders are more confident in applicants with stable employment for at least 6–12 months. |
4. Current Financial Obligations
Lenders check all your active liabilities, i.e., credit cards, car loans, EMIs, or BNPL accounts, to assess repayment capacity. Consolidating smaller debts before applying for a new personal loan can make your profile stronger. Learn a few debt management tips to improve your repayment health.
5. Relationship with Existing Lenders
If you maintain a long-term, positive history with your bank or NBFC, it improves your credibility. Many institutions offer pre-approved personal loans to loyal customers based on repayment track records.
6. Purpose and Loan Amount Requested
Lenders assess whether your requested amount aligns with your financial profile. Borrowing a realistic amount relative to income demonstrates responsible credit behaviour. Avoid overstretching your repayment potential just because multiple loans are available. You can use an EMI calculator to plan before applying.
7. Collateral-Free Nature of Personal Loans
Since personal loans are unsecured, lenders rely heavily on financial discipline. They cross-check your CIBIL score and repayment consistency before offering additional loans. Using a loan comparison platform can help you check personal loan eligibility instantly before applying.
| Mistakes to Avoid: Applying to several lenders simultaneously can lower your credit score. |
How Lenders Analyse Multiple Loans
When you already have several active loans, lenders take a deeper look at how well you manage them to assess your ability to handle additional credit responsibly.
| Evaluation Aspect | What Lenders Review | How It Impacts You |
| Repayment History | Past EMI patterns | Missed payments reduce approval chances |
| Total Liabilities | Active EMIs & credit cards | Higher liabilities mean reduced loan size |
| Income Strength | Salary or business income | Steady income supports approval |
| Loan Type Mix | Secured vs Unsecured | Balanced mix preferred |
Improving Your Profile Before Applying
Strengthening your financial profile before applying for another loan can significantly increase your approval chances and help you secure better terms.
1. Maintain a Strong Credit Record
- Pay EMIs on or before due dates.
- Avoid frequent credit enquiries.
- Use less than 30% of your available credit limit.
2. Optimise Existing Loans
If you have high-interest loans, consider refinancing. Paying off one smaller loan can free up EMI capacity and lower your DTI ratio.
3. Use Tools to Check Eligibility
Before applying, always check personal loan eligibility through online platforms. Many digital lenders, including Airtel Finance, offer instant eligibility checks with minimal documentation.
| Facts to Know: Checking eligibility doesn’t affect your credit score; it’s considered a soft inquiry. |
Airtel Finance Personal Loan – A Smart Option for Multi-Loan Borrowers
Airtel Finance offers personal loans up to ₹9 lakhs through a 100% digital process with instant approval and flexible repayment options. Whether you have existing loans or are applying fresh, you can check personal loan eligibility instantly via the Airtel Thanks app. Competitive interest rates starting from 12.75% make it suitable for managing additional financial needs.
| Important to Know: Each hard inquiry stays on your report for two years and affects approval chances. |
Your Next Step: Borrow Wisely, Manage Smartly
Applying for a new personal loan while repaying existing ones requires careful financial management and planning. Lenders evaluate multiple aspects, from your credit score and DTI ratio to your income stability, before offering additional credit. By maintaining timely repayments, reducing unnecessary liabilities, and regularly checking personal loan eligibility, borrowers can confidently approach lenders.
For a seamless borrowing experience, Airtel Finance Personal Loan provides quick digital approval, flexible tenures, and instant disbursal through the Airtel Thanks app, ideal for managing multiple commitments efficiently.
FAQs
1. How do lenders assess borrowers with multiple existing loans?
Lenders review your repayment history, debt-to-income ratio, and credit score to evaluate how well you manage current obligations before granting an additional loan.
2. Can I apply for another personal loan if I already have one?
Yes, you can. However, approval depends on your credit score, income stability, and overall repayment capacity as determined by your debt-to-income ratio.
3. Does having multiple loans affect my credit score?
Yes, multiple loans can impact your score. Timely repayments help maintain it, while missed EMIs or frequent credit enquiries can cause a significant drop.
4. What is a good debt-to-income ratio for new loan approval?
A debt-to-income ratio below 40% is generally preferred by lenders, showing you have enough income left to manage another loan comfortably and responsibly.
5. How can I improve my chances of loan approval with existing debts?
Pay EMIs promptly, reduce high-interest loans, and lower outstanding balances. Regularly check personal loan eligibility to understand your current credit position before applying.
