Can you have more than one loan at a time? Yes, you may have more than one personal loan from some lenders or several personal loans from different lenders.
Lenders may limit the number of loans or the total amount of money they will give you. They don't usually reject applicants just because of existing credit, but they may reject your application if you have too much debt. Generally, you can take out two loans at once, but you are more likely to be blocked from getting multiple loans by a lender than by law.
The best personal loan will help you reach your financial goal without hurting your credit or creating unmanageable debt at high-interest rates.
With that in mind, consider how many loans you can have and other ways to get the money you need before turning to another loan.
Does it make sense to have multiple loans?
It's never a good idea to borrow unnecessarily, but a few situations where you can have multiple loans at once might be your best option.
Let's say you take out a personal loan to consolidate credit card debt – one of the most common reasons for applying for a personal loan. After a year of making payments, you and your spouse decide to start a family. But it would help if you had an earnings treatment that is not covered by your insurance. The doctor requires prepayment and does not offer payment plans. A personal loan may be preferable to an increase in credit card debt.
Suppose you need money for urgent home repairs, veterinary bills, or car repairs. If ignoring spending will cause more financial problems and emotional distress than increasing debt, you can take out more than one loan.
Getting multiple loans from the same lender
Some lenders have a maximum number of how many loans you can take out, a maximum amount you can borrow, or both.
This table shows the number of personal loans that some popular lenders provide to one borrower:
|
Lender |
Number of loans |
Loan amount |
|
SoFi |
2 |
Up to $100,000 |
|
LendingClub |
2 |
$40,000 for 1 loan $50,000 for 2 loans |
|
Rocket Loans |
1 |
$45,000 |
|
Upstart |
2 |
$50,000 |
|
LightStream |
No limit |
$100,000 |
|
Earnest |
No limit |
$75,000 |
|
Discover |
No limit |
$35,000 |
Some lenders require the borrower to make certain payments before applying for another loan. LendingClub requires borrowers to make payments within three to 12 months before getting a second loan. SoFi needs three consecutive payments on an existing loan before applying again.
Upstart requires borrowers to make six payments on time before applying. Upstart borrowers must wait 60 days before reapplying if they repay the loan in less than six months or if they recently repaid the loan and any of the last six payments were not made on time.
According to lenders, it is not the question of how many loans you can have at once. If you have almost paid off one loan and don't have many other debts, another loan may be approved.
Risks of having multiple loans at once
While having multiple personal loans simultaneously is possible, certain risks are involved. Here are some things you might want to consider before taking out a second loan:
-
Impact on Credit Score - The more loans you apply for, the more your credit score will be checked. Lenders can see your applications and approvals for other loans so that they may see you as riskier.
-
Debt Accumulation – The more credit you have, the more debt you accumulate. You will have high monthly payments and a higher debt-to-income ratio. If something happens to your ability to pay off your debts, you could be in severe financial trouble.
-
Debt cycles – if you regularly take out personal loans or think you need multiple loans, this may indicate that you have fallen into a debt cycle. Find other ways to finance expenses, such as debt relief or responsible spending.
The lender will perform a rigorous credit check when you apply for a personal loan. Too many inquiries quickly can lower your credit score, making future loans more difficult and expensive.
Borrow money wisely and responsibly
Many believe personal loans are the best option for borrowing money compared to a credit card. Even if this financial product has many benefits that you can enjoy, it comes at a price. Control your borrowing habits and eliminate unnecessary debt. Here are some tips to help you become a responsible borrower.
Rate your availability
Knowing your availability before applying for a loan is one of the essential financial assessments. You may not be approved for a loan with monthly payments you cannot afford. Knowing how much you can pay and how much your loan is worth can help you find the right loan for your financial situation.
Timely payments
Your payment history plays an essential role in your credit history. Paying all your payments on time will likely improve your credit score. And remember that skipping any repayments will cause him to dive deeper. If you consistently miss your repayment dates, you will be subject to a District Court (CCJ) judgment.
Compare multiple loan offers
Suppose you consider getting a personal loan, research and research several offers before settling on one. Doing so gives you an excellent chance of finding the lowest APR for a personal loan. When comparing, consider annual rates, not just interest rates. You can reach multiple offers here without hurting your credit score.
