Can I Take a Home Loan and Personal Loan Together?

Posted on Thursday, August 14th, 2025 | By IndusInd Bank

Buying a house is one of the biggest financial goals for most individuals. However, sometimes the cost of setting up the house — interiors, furnishing, relocation, or emergency expenses — might go beyond the home loan amount sanctioned. In such cases, many wonder: Can I take a personal loan along with a home loan? The answer is yes, but with certain considerations. Taking both loans simultaneously is possible and even practical in some scenarios. But it requires a solid repayment capacity, good credit history, and a clear understanding of loan obligations.

In this blog, let’s understand how home loans and personal loans work, why someone might consider both together, and the key factors to keep in mind before doing so.

What is a Home Loan?

A home loan is a secured loan provided by banks or financial institutions to help individuals purchase or construct a residential property. The property itself acts as collateral for the loan. Home loans usually come with a longer repayment tenure (up to 30 years) and lower interest rates compared to unsecured loans because they are backed by a tangible asset.

The home loan amount you’re eligible for depends on factors such as your income, repayment history, age, and the value of the property. Lenders also consider your debt-to-income ratio before sanctioning the loan.

What is a Personal Loan?

A personal loan is an unsecured loan that can be used for various purposes — from medical emergencies to wedding expenses, travel, or even home interiors. Unlike home loans, personal loans don’t require any collateral and are sanctioned based on your credit score, income stability, and repayment history.

Personal loans typically have shorter tenures (1 to 5 years) and comparatively higher interest rates due to the unsecured nature of the loan.

Why Consider Taking a Home Loan and Personal Loan Together?

Taking a home loan and personal loan together may sound financially stressful, but in some cases, it could be a smart move. Here’s why individuals opt for both:

• Covering Costs Beyond Property Purchase: While a home loan covers the cost of buying or constructing a property, it doesn’t always include costs like furniture, modular kitchen, interiors, shifting expenses, or setting up essential utilities. A personal loan can bridge that gap.
• Managing Emergency Needs: Life is unpredictable. An emergency might arise during your home loan repayment period. Instead of liquidating long-term investments, a personal loan can offer quick funds.
• Leveraging Good Creditworthiness: If your income and credit score are strong, lenders may be willing to offer you both loans. This allows you to access more funds when needed without hampering your financial stability.
• Flexible Usage of Personal Loan: Unlike home loans which are disbursed in tranches based on construction or property value, personal loans are disbursed in lump sum and can be used at your discretion.

Factors That Affect Taking a Home Loan and Personal Loan Together

While it’s possible to take both loans together, banks assess multiple factors before approval. Here are the key things to consider:

Credit Score and History

Your credit score plays a major role in determining your eligibility for multiple loans. A score above 750 increases your chances of approval and may help you get a lower interest rate. Lenders prefer borrowers with a clean repayment history and low credit utilization ratio.

Income and Repayment Capacity

Lenders look at your monthly income, existing financial obligations, and EMI outflow. The total EMIs (including existing loans) should ideally not exceed 40-50% of your monthly income. If your debt-to-income ratio is too high, your loan application might get rejected.

Employment Stability

A stable job or consistent business income reassures lenders of your ability to repay both loans. Frequent job changes or unstable income might raise red flags.

Loan Tenure and Amount

If you’re already servicing a high-value home loan with a long tenure, lenders may be cautious about approving an additional personal loan. Opting for a shorter tenure or smaller amount for the personal loan might work in your favor.

Interest Rates

Since personal loans come with higher interest rates, your total EMI burden increases. It’s important to assess your affordability and not overcommit. Using online EMI calculators can help estimate your monthly outflow.

Existing Liabilities

If you have other ongoing loans like car loans or education loans, lenders will factor those in before granting an additional loan. Too many loans can signal financial stress.

Lender’s Policies

Some banks may have internal caps or policies around issuing multiple loans simultaneously. Always check with your lender about their specific terms.

To Sum Up

You can take a home loan and personal loan together — provided you have a strong credit profile, sufficient income, and manageable existing liabilities. It’s crucial to evaluate your financial bandwidth before committing to multiple EMIs. Taking both loans should serve a clear purpose, such as covering additional home setup costs or handling emergencies — and not result in unnecessary debt.

Before applying, compare lenders, read the terms carefully, and calculate your total EMI obligations. If managed wisely, having both a home loan and a personal loan can help you meet your financial needs without straining your savings.