But the right financial planning is necessary to take both loans together. If the management is loose, the risk of getting stuck in a date trap may increase. If you are thinking of taking a personal loan along with a home loan, then knowing some important things will be beneficial for you.
What is the difference between home loan and personal loan
Home Loan: It is a secure loan, that is, the property for which the loan has been taken, the same is mortgaged in return. Until the entire loan is repaid, the bank’s claim remains at that house. Due to this, the interest rate in the home loan is low and the repayment tenure is also long, which makes EMI easier.
Personal Loan: This is an unsecured loan. There is no guarantee in this. For this reason, its interest rate is high and the repayment term is small. But its special thing is that money is received quickly and you can use them in any need.
Understand the difference between both loans
Mortgage : The property has to be pledged in the home loan, not in personal loans.
Interest Rate: Home loan interest is less, more of personal loans.
Repayment Term: The tenure of the home loan can go up to 20-30 years, the personal loan is settled in 1-5 years.
Loan Amount: Home loan gives huge amount, personal loan is perfect for small expenses.
Can you get a personal loan if you have a home loan in advance?
Yes, if your credit history is good and has been filling on EMI time, then the lender is also ready to give another loan. Many times both loans are approved together, just your repayment capacity should be strong.
What are the things to keep in mind before taking a personal loan
Keep the credit score good: If your score is 700 or above, then the possibility of getting a loan is more likely. You can check your free credit score and report on Moneycontrol’s website or app.
Keep date-to-inches ratio control: More than 50% of your monthly income should not go to EMI. This causes the lender that you can easily fulfill your financial responsibilities.
Plan EMI thoughtfully: It is not easy to manage two EMI together. Therefore, keep the loan tenure and EMI amount that do not fall heavy on your pocket.
Consider joint loan too: If you apply a joint with your partner or family member for a personal loan, then the total total of income increases, which gives confidence to the lender and increases the chances of getting approval.
Check the reality of financial condition: Before taking both loans, it is important to see whether the balance in your monthly income and expenses is maintained. With the help of EMI calculator, you can guess how much EMI will have to fill you every month and will it fit in your budget.
Both loans also have some advantages
If you are able to manage home loan and personal loan together, then you can fulfill your different needs, such as buying a house and its decoration or rest of expenses.
Also, if both of them repay the loan on time, then it makes your credit profile strong, which can prove to be helpful in another financial plan later.
conclusion
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Summary
Already has a home loan and now need money for home decoration or other expenses? Know how you can also take personal loans together and what is important to take care of.
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Disclaimer
This fraction/article is written by an external partner and does not reflect the work of the editorial team of Moneycontrol. This may include references to products and services offered by Moneycontrol.