Multiple applications for simultaneous personal loans!

In most cases personal loans are opted for by individuals in order to meet emergency case requirements and also to make up some deficiency in other financial plans. People often apply for personal loans to multiple banks simultaneously for different reasons. There are a few pros and cons of such applications which the applicant needs to be aware of in order to make the best of the situation.

Reasons for multiple applications simultaneously

There can be several reasons for an individual to make multiple applications for personal loan from different banks simultaneously depending on his personal situation. Some of most common reasons are:

• People in immediate need of money want to make sure that they get the loan from any source whatsoever. Thus they make multiple applications to so as to get the loan from at least one of the sources applied to.
• Many applicants are in need of more money than they can probably get from a single source and hence they intend to raise a greater corpus through such multiple applications.

Pros of multiple applications simultaneously

Making multiple applications might seem to increase the chances of getting the desired amount in time from at least one of the banks applied to. Additionally in case more than one bank approves the loan than a greater sum can be raised in a short span of time in order to meet the contingency. In such an eventuality the individual benefits from larger sum available for usage at the time of need.

Cons of Multiple Applications for Personal Loans

What most people do not understand is the fact that making multiple applications simultaneously to several banks for personal loans can actually affect their chances of getting the money when needed. This is because all leading financial institutions in the country today refer to the credit rating of the individual from the CIBIL scores.

• When one applies to multiple banks the same is reflected in the CIBIL report and the credit rating takes a beating and the prospective lender may not agree to approve the loan.
• Furthermore once an application is rejected by a bank the credit rating dips further making it even more difficult to get hold of the loan at a time when it is needed most.
• Applying with several banks together may get the CIBIL credit rating in the negative while it is considered 0 for those who have not credit history and are applying for the first time.

The Smart Way

In situations where one wants to explore the feasibility of loans from different sources the ideal way is to collect the information regarding the schemes from all possible banks but avoid making the applications simultaneously. The rate of interest and other criteria of each of the banks can be compared and then the most suitable be applied to. In case the application is turned down by one then the next in the list should be approached for the loan.

Adopting the smart way one can ensure that the credit rating is not affected and at the same time all possible options are tried out when availing a personal loan.