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It’s good to apply for personal loans with multiple lenders: A Myth or Fact?

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It’s good to apply for personal loans with multiple lenders: A Myth or Fact?

Is it good to apply for personal loan with different banks?

  • Highlights

  • Personal loans can be used to fulfil various life needs

  • Applying for personal loans with different lenders can reduce your credit rating

  • CIBIL score is checked by all lenders before loan approval

  • Rejection negatively impacts your credit rating

Higher education, marriage, home renovation, medical emergency and vacation costs, are some instances where money is required on a large scale.

During such times, if comprehensive financial planning is not done, then loans appear to be the only solution. Personal loans are often the preferred choice in such situations, as the money obtained can be used for any purpose. In their haste to get the desired funds as quickly as possible, many people begin applying for the loan with different lenders. Some even think that doing such a thing will increase their chances of securing the loan. But, is it correct? And, does it really make a difference? We discuss this and more in the article.

But coming back to the question of, whether application to different lenders will increase the chances of securing a personal loan? Not likely. This is because all lenders in the country refer to the credit rating of an individual, also known as CIBIL score. When a person applies to many lenders, their credit rating is negatively affected as the individual may look credit hungry to the financial firms.

Furthermore, if one lender rejects the loan application, it will further register as negative marking on your CIBIL score, thus further hampering your chances of getting a loan. Thus, with each application rejection, your credit rating will be lowered. Therefore, it is not a good idea to apply to different lenders at the same time.

Personal loans from Bajaj Finserv are easy, quick and collateral-free. What’s more? They also provide pre-approved offers on business loan and home loan among others which enable faster disbursal of funds. Just provide some basic details to know your pre-approved offer.

The final word

From the above, we can easily infer that applying to several financial firms is not a good way to secure a personal loan. The ideal way of going about it would be to do proper research, collect information on different lenders, understand their terms and conditions and pick one with the lowest fees and charges.

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