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Borrowers can have more than one personal loan, but how many loans and how much you can borrow depends on a lender’s requirements and whether they’ll approve a second or third loan.
Managing multiple personal loans can also strain your budget, so it’s worth considering alternatives before turning to another loan.
How many personal loans can I have?
There are no federal regulations prohibiting someone from having multiple personal loans, says Carolyn Carter, deputy director of the nonprofit National Consumer Law Center. You can have more than one personal loan with some lenders or multiple personal loans across different lenders.
Some lenders have a maximum number of loans you can have with them, a maximum amount you can borrow or both. Lenders don't typically decline applicants solely because of an existing loan, but they may reject your application if you have too much current debt.
Getting multiple loans from the same lender
This table shows the number of personal loans some popular lenders will provide to a single borrower:
Some lenders require that a borrower make a certain number of payments before applying for another loan. SoFi needs three consecutive payments toward an existing loan before a borrower can apply again.
Upstart says borrowers can have one active Upstart loan, but they must wait at least six months before applying for a second loan. Borrowers must not have been disqualified for a loan within the previous 30 days.
» MORE: How to manage your personal loan
Qualifying for another personal loan
The biggest obstacle to obtaining another personal loan may be getting approved for one.
Here are some factors to consider:
Debt-to-income ratio: When reviewing a loan application, most lenders consider your debt-to-income ratio (DTI), which accounts for all your debt as a portion of your income. Lenders usually look for that number to be about 40% or lower.
Loan amount: Some lenders allow you to have more than one loan, but they may cap the total amount you can borrow.
New APR on loan: A lender could approve you for a second loan but at a high annual percentage rate because of your existing debt.
Before you move forward with a new personal loan, calculate your monthly payments and consider how they’ll fit into your budget. If you’ve almost paid off one loan and don't have a lot of other existing debts, you may be approved for another loan.
How do multiple personal loans affect your credit?
It’s worth considering the hit your credit score could take when you apply for another loan. New personal loan applications, whether approved or not, often trigger a hard credit pull that can temporarily drop your score by a few points.
If you apply for several loans in quick succession, the effect on your credit can multiply, and you could see a big dent in your score.
Alternatives to personal loans
Personal loans can be a long-term financial commitment and work best for large, planned expenses. For example, a debt consolidation or home renovation loan can be financially beneficial, but taking multiple loans can add substantial debt to your budget.
If you want to avoid taking another personal loan, here are some alternatives:
Buy now, pay later: "Buy now, pay later" plans let you pay for a purchase over a series of installments, often without interest or fees. Buy now, pay later can be a good option if there is zero interest and you have the cash flow to pay off the loan. But the convenience of buy now, pay later can lead to overspending.
0% interest credit card: If you have a good credit score (typically 690 or higher), you may qualify for a 0% APR credit card that could allow you to finance a large expense interest-free for an introductory period of 18 to 21 months. Make sure to pay off the expense before the interest-free period ends to avoid paying interest on your balance.
Loan apps: Cash advance apps can cover a short-term cash need by providing a small advance on your paycheck. Instead of interest, cash advance apps may charge a subscription fee or an optional tip for the service. Funding can take one to three days, although borrowers can sometimes get instant funding by paying an extra fee.
Medical payment plan: Many doctors, dentists and veterinarians allow patients to work out a payment plan. Some medical providers also make medical credit cards available to help patients with costly procedures.
Home equity line of credit: Homeowners can consider a HELOC to fund a large expense, like a home renovation. A HELOC is a credit line that you draw on as needed and pay interest only on what you borrow for a set amount of time, after which you pay the principal during the repayment period. The long draw period — typically 10 years and then 20 years for repayment — makes HELOCs better for expenses that may have unexpected costs.
» MORE: NerdWallet’s best HELOC lenders
Other ways to make money: If the expense can be delayed — especially if it’s a discretionary expense — try looking for different ways to make money to pay down your original loan and improve your DTI.
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