The ability to fully borrow depends on their ability to repay. Similarly, if you already have a loan, the recording of the second loan depends on your current income and ability to repay. Therefore, it is a little important to decide whether or not you can go for many loans. Pros and cons of taking several loans at once
Another important point to consider – not all loans are good loans. Therefore, to go into any case you should first think about how it will affect you and your finances. Let’s say that you go for a home loan, this is usually a long term loan, but in the end, there will be a property in your name. The same is that with car loans, you need to pay the EMI but in the end, you have the car. On the other hand, there are loans with a high interest rate and at the end of the term you do not have anything, you pay the amount with interest. So, it is worth to go for such a loan yourself. It is understood that there is also some emergency situation when there is no alternative except for going to such a loan, it is acceptable in any way. But taking a loan for just one luxury is not worth it.
Let’s better understand the pros and cons of many loans with the help of an example-
Harish, 35, who lives in Bangalore, has a monthly salary of INR 80,000. First of all, he took a home loan for which he is paying a monthly payment of US $ 30,000 as an EMI. After a few years, they took a car loan, for which they are paying monthly INR. In the form of 10,000 EMI After a year or two, he again went for personal loan until he got a salary increase and now his salary is $ 9, 000. So, for personal loan, he is paying 10,000 as the EMI.
Now calculate – Total payable amount as 30,000 10,000 10,000 = 50,000 EMI.
Total pay = 95 0000
Monthly Total EMI = 50,000
Balance = 95,000-50,000 = 45,000
Pros and cons of taking several loans at once
Therefore, the remaining 45,000 is less than half of this salary and in it they have to take care of the monthly expenses of their family and for the last 5 years SIP and LIC are doing. Monthly expenses of Harish are 40,000, so due to the many loans now he has left only 5,000 hands and he has to pay the premium for both LIC and SIP. It is not possible to do these two with some savings for an emergency. Therefore, he needs to stop investing in both of them.
Many borrowing professionals at one go
You Provide Flexibility! When you have easy access to money, you can use it as you want and where you want it. You do not have to worry about all the time.
Buying many loans and getting on time with its EMI can improve your credit history and therefore the credit score.
You can fulfill many desires at the same time. As with the help of many loans, you can do home, car, vacation and more at the same time.
Opposition to borrow several loans at one go
You have to pay EMI in relation to all the loans at the same time. This can affect your financial goals. When you pay more on the EMI, you do not leave money for investment and in some cases even for savings.
Many loans at one time always cause mental stress and stress for the borrower because the borrower is always worried about repayment.
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If you have many debts, you are paying more on interest than you borrow.
In the event of a lot of debt at the same time, it is likely that you can delay any kind of EMI, either because of the urgent need of money or for any other reason. This can negatively impact your credit score. This will directly affect your future credibility.
Therefore, whenever you want to go for a loan, first analyze whether it is worth or not. Only go for those loans that can give you better returns in future or who can help you generate more money in the future. Remember it feels like a fun and makes you happy when you get loan easily, but the picture starts when you start paying it. Repayment time is long and can adversely affect your finances! Therefore, think twice before sorrow!