Two Loans, One Bank – All About It

Very often we take a small loan at first. However, as time goes by, we build more trust with the brand. Alongside, we start to like the concept of personal loans!

Many lending institutions are open enough to offer a second loan. This could be basis the individual’s financial behavior and repayment pattern. The lender can also base its decision on the previous payments made by the individual (timeliness and uniformity of repayments). If you have maintained clean past records, then it is much easier to have a second loan. It has also been recited that lending institutions, at times take a call on the amount to be approved and disbursed, relative to the credit score and income parameters.

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It is common to find a mountain of information about personal loans, however not all can be called relevant for decision making. So, we shall go slow on explaining different concepts related to personal loans.

Below we have focused on the different concepts related to two personal loans, availed from the same bank.

 Let us throw light on how Parallel Loan works?

A parallel can be known as a second loan acquired from a single bank in addition to an ongoing loan. Different EMIs are required to be paid for two different personal loans. This will be including the interest component along with the principal amount. The first loan does not close when the second loan is taken.

How will the interest rates be structured with the second loan?

The interest rates do vary with the parallel loan; it is only similar to the first loan. The interest rate will depend on the loan amount and the risk quotient. Though, if the repayments have been accurately on time, then possibility for lower interest rates exist. The only assurance given can be with reference to the parallel loans, is the “servicing.” Primarily true, the same bank takes more interest and care in providing an easy personal loan.

Quite often, banks produce attractive offers, and this is when you should immediately agree. Interest rates are also kept competitive around the same time.

Is it possible to avail the second loan collaborated with any loan?

Yes, you are allowed to avail the second loan combined with any existing personal loan. However, this is at complete discretion of the lending financial institutions.

When can I avail a second loan?

It is easy to avail a parallel loan, as and when its required. The actual amount of EMIs vary, depending on the personal loan and designated bank. It is imperative to know that the purpose for each loan must be clearly known. However, if too many loans are sanctioned, payback becomes tough. Two distinct possibilities can be quoted here:

1) The debt amount doubles

2) Bad debts impact your credit score negatively. Thereby, turning off chances of personal loan in future.

To summarize, lenders would never offer two personal loans at the same point of time.