Can You Get More Than One Personal Loan?

Many people take out personal loans to cover unexpected expenses and manage major life events. But what if just one loan isn’t enough?

If you’ve ever wondered, “How many personal loans can you have at once?” you’re in the right place. The financial pros at Tower Loan answer this question and explain the implications of having multiple loans at once.

Quick Answer: How Many Loans Can You Have at Once?

Technically, you can have an unlimited number of personal loans at once. There is no legal cap on how many loans you can have. However, approval depends on lenders’ rules, your creditworthiness, and your debt-to-income ratio.

Can You Have Multiple Personal Loans?

Although you can have multiple personal loans, approval is never guaranteed just because you already have one. Lenders are typically more concerned with the risks associated with numerous loans than with the number of loans. At Tower Loan, you can have up to two open loans at a time.

Key Factors Considered by Lenders

When a lender is deciding whether to approve you for another personal loan, here are the major factors they will consider:

• Credit score
• Payment history
• Outstanding balances on current loans
• Debt-to-income ratio
• Income stability
• Employment history
• Recent credit inquiries

Getting Multiple Personal Loans with the Same Lender

How many loans can you have at once from the same lender? For convenience and continuity, many people first pursue a second loan with their current loan company.

Lender-Specific Loan Limits

Lenders may set limits on the number of loans per borrower or the maximum total loan balance across all personal loans. Standard caps range from $20,000 to $50,000 depending on company policy, state laws, etc.

When Might a Lender Approve a Second Loan?

Your current lender may be more willing to approve a second loan if you’ve been consistent with on-time payments. You may also increase your chances if your credit score has improved, your income has increased, or your existing debt has decreased.

Multiple Personal Loans with Different Lenders

How many loans can you get with different lenders? You might consider a different lender for your next loan based on rates, terms, or approval criteria.

However, some people find it more difficult to track due dates and are more likely to miss payments when multiple lenders are involved.

The Impacts of Debt-to-Income Ratio

Here’s a look at what DTI is and how it relates to the question of “How many personal loans can you have at once?”

What Is Debt-to-Income Ratio (DTI)?

Debt-to-income ratio, or DTI, is a comparison of your total monthly debt payments to your gross monthly income. Lenders use DTI to assess your ability to afford an additional loan.

Typical DTI Expectations

Although standards vary among lenders, a DTI below 36% increases your chances of approval for another loan. If your DTI is up to 43%, you still may qualify for another loan based on your credit and income.

Be mindful that personal loans increase your monthly debt obligations, which can push your DTI higher. Higher DTIs can result in loan denial, smaller loan amounts, and higher interest rates.

Impacts of Multiple Personal Loans on Your Credit

Can you take out multiple loans, and what are the credit impacts?

Credit Inquiries

Applying for another personal loan will likely trigger a hard credit inquiry. This may result in a slight, temporary dip in your credit score.

Payment History

Payment history is a very important credit factor: on-time payments across multiple loans can improve your credit, but late or missed payments can damage it.

Credit Mix and Utilization

Personal loans, like the ones we offer at Tower Loan, are traditional installment loans that diversify your credit mix. Unlike credit cards, they don’t significantly affect utilization, though total debt still matters.

Is It a Good Idea to Have Multiple Personal Loans?

Now you understand the answer to “Can you get more than one loan at a time?” Is it a good idea?

When Multiple Loans Make Sense

• You are consolidating high-interest debts into lower-rate loans
• You are covering a considerable, one-time expense
• You have a substantial income and can establish manageable monthly payments

When Multiple Loans Are Risky

• You use loans to cover ongoing overspending habits
• You struggle to keep up with your existing payments already
• You are paying high interest rates or excessive fees
• You are constantly feeling financially stressed

Alternatives to Getting Multiple Personal Loans

If you decide not to take out more than one loan at the same time, consider these alternatives.

Debt Consolidation Loans

A debt consolidation loan combines multiple debts into one payment, ideally with a simplified repayment process and a lower interest rate.

Balance Transfer Credit Cards

A balance transfer credit card can help you with a short-term payoff. However, it’s essential to pay off your balance quickly to avoid excessive interest and post-promotional rates.

Financial Coaching and Credit Counseling

If you need help managing your finances, there are experienced professionals available to assist you with creating a repayment plan without taking on new debt.

How to Successfully Manage Multiple Personal Loans

If you already have one personal loan, it’s essential to manage any additional debt you take on wisely. Here are some tips for managing multiple loans.

• Track all payment due dates on your calendar
• Set up autopay for all your loans
• Periodically assess your loan terms
• Start building a small emergency fund
• Avoid taking on new debt unless absolutely necessary

Signs You May Be Taking on Too Much Debt

• You rely on loans to pay for recurring costs
• You have difficulty paying for your basic living expenses
• You frequently miss payments
• You feel overwhelmed by payment due dates

FAQ Related to “How Many Personal Loans Can You Have at Once?”

Below are answers to some of the most common questions our customers ask us about this topic.

At Tower Loan, we make it quick and convenient to apply for one or more personal loans online, in our local offices, and through our mobile app. If you have additional questions related to “How many personal loans can you have?”, we also welcome you to call the branch nearest you during business hours to learn more.

How many personal loans can you legally have at one time?

There is no legal limit to the number of loans you can have. Additional loan approval is based on lender policies and your unique financial situation.

Can having multiple personal loans hurt my chances of future approval?

Possibly, as high debt amounts or missed payments can make a lender less likely to approve a new application.

Will lenders see all of my personal loans?

Yes, lenders review your credit report to assess a new application, so they will see all outstanding loans you have.

Is it better to refinance instead of getting another personal loan?

Possibly, because refinancing or consolidating your loans could simplify the payment process and reduce the interest you owe.

Do multiple personal loans increase interest rates on new borrowing?

If your DTI increases or your credit score declines, multiple personal loans could potentially increase your interest rate.

Can I pay off one personal loan early to qualify for another?

Yes, if you pay off an existing loan early, you could improve your DTI and increase your chances of approval for a new loan.

What should I do before applying for a second personal loan?

Before applying for an additional loan, check your credit, review your monthly budget, and make an honest assessment of whether a new loan is necessary.