March 15, 2026 · 4 mins read
Santhosh Kumar
Yes, in India you can take a home loan even if you have a personal loan. But lenders will seriously consider your income, current EMIs and repayment ability. If your liabilities are within limits and credit history is good, banks and NBFCs will still sanction the home loan.
Most borrowers make the mistake of thinking that ‘personal loan’ on top of an existing home loan means instant rejection. In reality, lenders assess the borrower’s overall financial profile rather than rejecting applications simply because another loan exists.
When you seek a home loan, the lender checks your monthly income, outstanding EMIs, credit score and the stability of your job. Your credit score, reported by TransUnion CIBIL, gives lenders insight into your previous repayment behavior. A good score means you’ve handled credit well.
But lenders also look at what percentage of your income is already tied up in repayments. This evaluation assists them in deciding if you can easily handle an additional EMI on top of your current overheads.
One of the key parameters lenders evaluate is the debt to income ratio, which measures the percentage of your monthly income used for repaying loans. In India, most lenders prefer that total EMIs remain within 40 to 50 percent of your monthly income. If your current personal loan EMI is eating up a significant chunk of your income, the lender could cut down the home loan amount or could first ask you to clear-off some of the personal loan.
Having an existing personal loan does not necessarily prevent you from getting a home loan, but it can influence the loan amount you are eligible for. Because personal loans tend to have higher rates and shorter tenure, they generate relatively higher EMIs. This bumps up your monthly payments and might actually lower the mortgage lenders are willing to approve.
They sometimes advice you to clear the personal loan or at least reduce it before they can sanction a larger housing loan.
So, if you will be applying for a home loan while servicing a personal loan, you need to beef up your profile.
Begin by checking your TransUnion CIBIL credit report to confirm that your repayment history is accurate and error-free. An excellent credit score gives lenders more confidence.
You can also attempt to pay down your personal loan. If you can prepay part of the loan or close off your smaller debts, you can reduce your monthly EMI commitments and thereby improve your chances to qualify for a home loan.
Another useful strategy is to apply for a longer tenure home loan. The longer tenure, the lesser will be the EMI and hence, easier to arrive at acceptable debt to income ratio.
Staying steadily employed and earning steady income is important as well. Lenders also like borrowers who have a predictable financial profile.
And, last but not least, don’t apply for several loans concurrently. Excessive credit enquiries impact how lenders view your financial habits.
If you plan ahead and manage your finances, you can get a home loan despite still paying off a personal loan.
Also Read: Best Credit Cards In India You Can Get On A ₹2,000 FD (2026 List)
Yes, most banks will allow this if you can afford both monthly payments based on your income.
Yes, since the monthly payments you make for a personal loan will count toward your overall monthly debt ratio and thus lower the amount a bank may lend you.
If you can pay off or at least significantly reduce your personal loan before applying for a mortgage it will open the door for you to qualify for a much larger mortgage amount than you might normally qualify for.
Yes, having a solid credit score with Transunion CIBIL gives a lender an indication that you are capable of making prompt payments and therefore increases the likelihood of the lender approving your mortgage application.
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