How does taking multiple personal loans affect my financial health?

As of June 2025, taking out several personal loans can have a big impact on your financial situation, particularly given the state of lending. Although having multiple personal loans at the same time is technically feasible, there are a number of risks as well as difficulties involved that should be carefully considered.

When you take out multiple personal loans, your overall debt burden increases, leading to higher monthly repayment obligations. Managing several EMIs simultaneously can be difficult, particularly if your income has not increased in proportion to your debt. Your monthly budget may be strained and you may find it more difficult to save money or deal with unforeseen costs. Your credit score will probably suffer if you miss or postpone payments, as you may be subject to late fees and penalties. It may be more difficult to obtain favourable interest rates or to be eligible for future loans if your credit score is lower.

Every time you apply for a new loan, your credit report is also subject to a hard inquiry.

Having multiple hard enquiries in a short amount of time can lower your credit score even more and indicate financial distress to lenders, which makes them less likely to grant you more credit. With recent regulatory changes, lenders now report borrower activity to credit bureaus more frequently, so any missed payments or over-borrowing will be reflected in your credit profile much sooner.

There is also the risk of higher overall interest costs, as each loan may carry its own rate and fees. If you are unable to keep up with repayments, you could fall into a cycle of borrowing to repay existing debts, increasing the risk of default.

To maintain financial health, only take multiple personal loans if absolutely necessary, and always assess your repayment capacity. To ease repayment obligations and lessen financial strain think about combining all of your debts into a single loan with a reduced interest rate. Prioritise your most important bills, set up automatic EMI payments to prevent missed payments and refrain from taking out new loans until your current debts are paid off.