Can the client get several credit lines from different banks

The clients usually doubt if the can be opened several separate credit lines in different banks. In reality, it is absolutely possible, but it is important to be very responsible borrower to manage multiple accounts.

Sometimes people forget that money borrowed need to be returned. So, to satisfy personal or business needs they take multiple loans. If the clients return money to banks on time, there is no problem. If a person fails, the consequences can be dramatic.

Why multiple credit lines can be beneficial

There are several obvious benefits that people enjoy when they open credit cards in various banks. The main are:

  • The client can enjoy big borrowing. Single bank rarely gives to a person a big sum loan. So, people multiple the loans in order to get access to bigger financing. It is easier to get several small sum loans than one big one.
  • When the client has multiple credit cards, he can enjoy the benefits of each of them. Usually, the banks propose truly good benefits to cardholders. If a person has a good credit card, he can even get a cash return on every single purchase.
  • Different banks charge different interest rates for the loans. So, if one loan is more expensive than the other one, it is possible to allocate money from one account to another to make the borrowing cheaper. Many cardholders do so.
  • It does not influence the borrower credit history. Financial bureaus do not care whether the person borrows from one bank or from many. They just want to make sure the borrower pays back on time. Then he is assigned the good credit score.

These are evident advantages of having multiple credit lines from different banks. Though it is beneficial, the bank in order to open the new credit line always checks the credit history record of the client. If it is back he can reject the application.

What disadvantage of having multiple loans is

Having additional loan seems to be very beneficial, but there is one important disadvantage. In practice, people who take too many credits do not really have good earnings. That is why for them it is truly hard to make regular monthly payments or to pay the loans back in full.

The more loans the person has, the harder it is for him to manage them. If the client can’t pay by payment due date, he will be fined. Then the personal data of a client will be passed to financial bureaus, that will assign to the borrower a low credit score.

This is the biggest danger that borrowers face. That is why it is important to stay rational when taking credits. It is better to start with only one credit line. If the personal income grows then the person can ask the bank for a bigger line. That is far more secure than having several loans at one time.

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