Can I Apply For a Credit Card And Loan at the Same Time?
Last Updated : Jan. 22, 2020, 12:46 p.m.
YES, YOU CAN APPLY FOR A CREDIT CARD AND A LOAN AT THE SAME TIME.
You can apply for both the credit facilities at the same time. But the approval will most likely depend on your credit score. There are many credit information agencies such as CIBIL that provide credit scores to individuals based on their repayment history. When you apply for a loan or credit card, the first thing is your CIBIL score that lenders check. If it is good, the lender will not hesitate a bit in approving your credit card or loan. But in case it is not up to the mark, your application may not be approved. And just for your knowledge, a score of 700 or above is regarded as the good CIBIL score.
But here is one thing that you should keep in mind despite having a good CIBIL score. It may be possible that your personal loan amount could impact your credit card limit. Wondering how? Let’s see this through an example.
Suppose you earn a monthly salary of ₹45,000 and have a CIBIL score of 760. Now, you want to apply for a credit card with a decent limit and a personal loan of ₹5 lakh for a period of 5 years. With such a good CIBIL score, you will face no problem in getting both these credit facilities. But it is possible that you may not get a credit limit as much as you were expecting because of your personal loan .
Let’s understand how. With a personal loan of ₹ 5 lakhs at an interest rate of 15% per annum, you will be paying an EMI of around ₹ 12,000 per month. After paying the EMI, you will be getting only ₹33,000 in your hand. So the credit limit on your card will be determined by the amount left after paying the loan EMI. With this amount, you could get an initial credit limit ranging from ₹50,000 to ₹70,000. While without any personal loan, this initial limit could range from ₹68,000 to ₹90,000.
So, you can see how your personal loan is making a difference of around ₹18,000 to ₹20,000 in your credit limit. However, you could increase your credit limit after a few months by paying your dues on time and using your card in a disciplined way. You can see it in the table below.
| Details | Amount |
|---|---|
| Total Monthly Salary | ₹ 45,000 |
| Current Obligations (Personal Loan EMI) | ₹ 12,000 |
| Remaining Amount after paying the EMI | ₹ 33,000 |
| Credit Limit on ₹ 45,000 | ₹ 68,000 - ₹ 90,000 |
| Credit Limit on ₹ 33,000 | ₹ 50,000 - ₹ 70,000 |
| A difference that your Personal Loan Amount will make on your Credit Card Limit | ₹ 18,000 - ₹ 20,000 |
Note – Calculations and estimations are just for illustration purposes.
So, it must be clear to you now, that there is no problem in applying for a credit card and a loan at the same time. If you’re having a good CIBIL score , you will get the approval for both of them instantly. But the credit card limit could lessen due to the loan obligations. While having a poor CIBIL score, a lender may reject your applications for both credit cards and loan.