How does taking a personal loan impact my overall debt profile?

Adding a personal loan to your financial profile is a decision that should be weighed carefully as it not only increases your total liabilities but also influences how lenders view your creditworthiness. Lenders often look at your overall debt level and your ability to manage many repayments before approving new credit. If you already have several loans or credit card balances, taking on additional debt may make it harder to qualify for future loans or result in higher interest rates.

That said, responsible use of a personal loan—such as borrowing for essential needs and making timely repayments—can demonstrate your reliability as a borrower. This positive repayment behaviour is reported to credit bureaus and can strengthen your credit history, making it easier to access credit in the future. However, if you frequently miss payments or struggle to keep up with multiple EMIs, your credit score can drop, and you may face difficulties when you need financial assistance down the line.

It’s also worth noting that having a mix of different types of credit, such as credit cards, home loans, and personal loans, can sometimes help your credit profile—provided you manage all of them well. The key is to keep your debt levels manageable and ensure your total monthly repayments remain within a comfortable portion of your income. Regularly reviewing your credit report as well as keeping track of your repayments can help you stay on top of your finances and avoid overextending yourself.