3 benefits of availing of your second loan from your existing lender

Loan stacking, or taking multiple loans at the same time, can negatively impact your financial health if not managed carefully. Each loan comes with its own interest rate, repayment schedule, and terms and conditions. When loans are taken from different lenders, tracking multiple EMIs can become challenging and may place unnecessary strain on your monthly budget.

Having several loans across various lenders can also increase the overall cost of borrowing. Differences in interest rates and overlapping repayment cycles can lead to higher monthly outgoings, affecting cash flow and making timely repayments more difficult over time.

That said, taking more than one loan is not always a problem—especially when done in a planned and responsible manner. Instead of borrowing from multiple lenders, approaching your existing lender for an additional loan can often be a more manageable option. Since the lender is already familiar with your credit history and repayment behaviour, they may offer better terms, quicker approvals, and simpler repayment structures.

Before deciding, it helps to understand your borrowing capacity. With no paperwork, no branch visits, and no long waiting periods, you can check your personal loan eligibility using just your mobile number and OTP through a 100% online process.

Below are some key benefits of borrowing multiple loans from your existing lender.

When you plan to take another loan, such as a personal loan, it is often beneficial to approach your existing lender first. A strong repayment record demonstrates reliability and financial discipline, which builds trust with your lender. This can make the loan approval process quicker and smoother, as your lender is already familiar with your credit behaviour.

Borrowers with a good track record may also gain access to better loan terms. This could include lower interest rates, higher loan amounts, or more flexible repayment schedules, depending on your eligibility. Since the lender already has insights into your repayment habits, they are more likely to offer options that suit your financial situation.

Additionally, applying for a personal loan with your existing lender can reduce administrative hassles. You may not need to submit extensive documentation again, and the overall process can be simpler compared to applying with a new lender. This can save time, reduce stress, and make it easier to manage your finances efficiently.

By leveraging your relationship with your current lender, you can not only secure a personal loan faster but also enjoy a more personalised borrowing experience tailored to your repayment capacity and financial needs.

When you apply for a personal loan with your existing lender, most of your required information is already on file. Your lender is already aware of your identity, income details, credit history, and past repayment behaviour. This means you don’t have to spend hours completing paperwork, gathering documents, or submitting ID and address proofs again.

On the other hand, applying for a loan with a new lender requires meeting eligibility criteria, filling out detailed application forms, and submitting all supporting documents from scratch. This process can be time-consuming and adds unnecessary complexity to your borrowing experience.

By opting for another personal loan with your current lender, you can enjoy a faster, smoother, and hassle-free application process. Since most of your details are already verified, you can access funds more quickly without repeating documentation.

Many lenders also offer pre-approved loan offers to existing customers, allowing you to check your eligibility and apply instantly with minimal steps. This makes meeting your financial needs simpler, quicker, and more convenient.

It is always a good idea to take a combination of loans from your existing lender. This is because it lowers your total EMI obligation and keeps your funds free for other purposes. Consider this situation: you have taken a business loan to expand your practice or firm’s reach. Now, owing to a wedding in the family, you need more funds. You can use your home as collateral and get a secured loan from your existing lender. By doing this, you benefit in many ways.

Additional Read: What are the Fees and Charges Applicable on your Personal Loan?

As an existing customer with a good repayment record, you will easily get a sanction on affordable terms. On the other hand, pledging a high-value property will help you get a high sanction with a convenient tenor and a nominal rate of interest. Also, since you have a relationship with the lender, you will be able to negotiate a better repayment schedule-one that helps you manage your cash flow more easily.

So, it is evident that approaching your existing lender with your new financial requirements is beneficial. You can negotiate better terms based on your credit score and repayment history, and borrow funds as per your needs, at a competitive rate of interest. Streamlining the process will allow you to make timely repayments towards both loans and maintain your credit score too.