Is it worth applying for Personal Loans from multiple banks?

Personal loans are unsecured loans offered by banks, and they can be used by a person to meet emergency or unplanned expenses. Some people opt for personal loans to cover the expenses for bigger expenditure, such as holidays or weddings. A personal loan gets processed very quickly, and in some cases, a personal loan for an individual can be approved in a span of as little as two days.

However, with multiple criteria, people might sense it tough to get loans from a particular bank. So, in order to get approval, they may apply at multiple banks. However, this is easier said than done, and a loan applicant must put in some thought before going through with this. So, to help you, we have listed out the advantages and disadvantages of applying for personal loans from multiple banks.

What are the Advantages?

If in case, a person applies for a personal loan from multiple banks, and he completes all the formalities, like submitting all the documents required for personal loan, still it is unlikely to get approved at multiple banks at once.

However, if you do get approval for a loan from multiple banks, you would have more funds than you require and can spend them however you like. But, this is not the case every time, so it is better that you don’t get your hopes up too much.

What are the Disadvantages?

Personal loans are given by banks only to the people who are eligible. Banks usually check a person’s credit score via CIBIL when the applicant provides documents required for personal loan with the application form. A person with a bad history of irregular payments or defaults will have a bad CIBIL score. Due to this, the bank will see him as an unworthy candidate for the loan.

Also, if you apply for personal loans at multiple banks, and if one bank rejects your application, then it may affect your CIBIL score. This will, in turn, affect your chances of being selected by any other bank for a loan. Hence, if you have a bad credit score, applying to multiple banks for a personal loan may not be in your best interests. First, make sure to build a good credit score and then only apply for personal loans.

How do I make sure I Get a Personal Loan?

Applying for a personal loan at multiple banks can have advantages, but there are also disadvantages which can affect you. So, you have to think before applying for a loan at multiple banks.

To wrap up, it is okay to apply for a personal loan at multiple banks or companies. But it is crucial that you weigh the pros and cons of all the options available to you, and make an informed decision. Any incorrect move can lead to bigger problems like bad credit score and hence ruin your chances of applying at other banks.

Hi I am Atish Nayar. I am working as freelancing agent.