Sometimes unexpected life events create the need to take out multiple personal loans at once. This video outlines how many personal loans you can have at once and presents options for reducing your debt.

Can I Avail Two Personal Loans?

It is possible to take out two personal loans simultaneously. In fact, there is no limit to how many personal loans you can have out at once.

However, the status of your current loan will impact the lender’s decision regarding approval for a second loan. Factors such as your debt-to-income ratio and credit history, which lenders consider when accessing new loan applications, may be negatively impacted by your prior loan.

Most lenders allow individuals to take on additional loans if they pay off part of the balance of the initial loan. Individuals with a good credit score and a history of on-time loan repayments can generally secure multiple personal loans.

You can take out two personal loans with the same lender, or get a second loan from a separate lender. If your credit is negatively impacted by your prior loans, you may have to look to subprime personal loans or even payday loans to take out a second loan.

Subprime Personal Loan Direct Lenders

Subprime lending refers to offering loans to people with poor credit scores. This includes anyone with a credit score below 600. However, these loans have higher interest rates because of the risk that the lender takes on.

How to Get Multiple Payday Loans

If you cannot get approved for multiple personal loans, an easier option may be to take out multiple payday loans. These are short-term loans for a small amount of about $500.

Payday lenders target anyone who needs fast cash to make ends meet. These lenders are a bit more relaxed in their lending standards. However, they will still look at your credit report before giving you multiple payday loans.

Recent CFPB regulations allow borrowers to take multiple payday loans. However, unlike personal loans, some states do limit the number of payday loans you can have. This is because payday loans put borrowers at a higher risk of increasing their debts or defaulting.

How to Pay Off Multiple Loans

No matter what kind of loans you take out, if you are not careful, you can plunge yourself into a cycle of debt. Here are some great strategies if you are struggling to pay off multiple personal or payday loans:

1) Focus on paying back the high-interest loans first. This way, you can prevent the higher interest rate from creating a larger payment down the road.

2) Reach out to your lenders to see if they have an extended repayment plan on your lower APR loans. If they can push back the repayment date, this gives you time to first deal with the higher APR loans.

3) Be open with your lender. If you reassure your lender directly of your intention and plan to repay them, they may not report negatively on your credit report.

4) Focus on taking control of your finances and take action on your debt management plan. You can consolidate your debt by taking a personal loan with a low interest rate to pay some outstanding high-interest personal loans or payday loan debts.

Bottom Line

You can take out multiple personal loans if you show promise of repaying them in accordance with the lender’s terms. However, getting a second loan can trap you in a cycle of debt and affect your credit score and financial health. Just because you can take out many personal loans at once, doesn’t mean you should. Do your best to avoid multiple loans if at all possible.

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