This will enable lenders to get accurate information about defaults and payment records quickly. This will help in better assessment of borrower’s risk and curbing those taking multiple loans.

Multiple loans will be banned!

These instructions issued in August 2024 have been implemented from January 1, 2025. The Reserve Bank believes that this will help lenders in risk management. Till now, due to different EMI payment dates, reporting once a month could cause a delay of 40 days in the payment record. But now with updating every 15 days, this delay will end and lenders will get information in real time. Overall, now the delay in EMI reporting will be reduced and the correct information about payment-default will be available quickly.

This rule will also curb the habit of taking multiple loans

New loan takers get more loans from many places which is more than their capacity to repay. Banks themselves had suggested updating the records more frequently, so that correct information of the loan takers can be available.

Now if a person takes multiple loans and his EMI is due on different dates, then his financial activities will be visible in the credit bureau system within 15 days. This will give lenders accurate and fresh data about the financial condition of the borrowers.

‘Evergreening’ will be stopped!

Lenders believe that this change will also stop activities like ‘evergreening’. In this, borrowers take a new loan when they are unable to repay the old loan, due to which their real situation remains hidden. By reducing the reporting time, credit bureaus and lenders will get more reliable data and the lending system will be strengthened. This new rule of RBI will make the lending system more transparent and strong and it will be interesting to see what effect this has on the loan takers.

Benefits of Personal Loan

Availing a personal loan has become a unique facility in today’s busy life. Its main advantage is that it can be availed without any guarantee. The specialty of a personal loan is that it can be used for a variety of needs, such as emergency medical expenses, education, marriage, home repairs or other personal needs.

Personal loans are easy to get. Most banks and financial institutions offer online application facility, which saves time and simplifies the documentation process. Apart from this, the loan amount is also transferred to your account within a few days, which helps in meeting your needs quickly.

Negative aspects of Personal Loan

When there is an urgent need of money, most people rush towards personal loan because it is easily available. The biggest negative point of personal loan is that its interest is very high. The tenure of personal loan is very short, and if the payment is not made on time due to any reason, the bank takes advantage of the helplessness. Taking a personal loan without proper planning can lead to financial crisis. Not only this, if you do not pay the EMI on time, it can also spoil your credit score.

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The post Multiple loans Rule: RBI suddenly changed this rule, it is no longer easy to take more than one personal loan! first appeared on Rightsofemployees.com.

After this, it may be challenging for individuals who wish to take multiple personal loans simultaneously in the new year. Time till January 1 was given to implement the new directive issued in August and now it has come into effect.

What changes did RBI make?

According to a TOI report, the updated regulation now requires lenders to report borrower activity to credit bureaus every 15 days, as against a one-month interval earlier. More frequent updating of records will cause borrowers to face greater scrutiny, reducing the likelihood of taking multiple loans at once. RBI said shortening the reporting cycle will improve lenders’ ability to assess borrower risk.

Get more accurate and timely data

Sachin Seth, chairman of credit information company CRIF High Mark, said, “Equated monthly installments (EMIs) fall on different dates throughout the month. Reporting data once a month can delay updates on defaults or repayments by up to 40 days, leading to outdated information for credit assessment. Switching to a 15-day reporting cycle will reduce these delays significantly. Lenders will now have access to more accurate and timely data.”

It will help in curbing excessive borrowing

SBI chairman C.S. Setty, in an interview to TOI, spoke on the issue of new borrowers taking loans from multiple lenders, often beyond their repayment capacity. He said SBI has suggested more frequent updates to provide a clear picture of borrower behaviour. “This move will help curb excessive borrowing by individuals,” he said.

Sachin Seth also said that borrowers taking multiple loans on different due dates will now see their financial activity in the system within two weeks. This reduces the ‘blind spot’ where important credit data may not be visible, enabling lenders to make more informed decisions.

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