Technically, you can have as many personal loans as you qualify for, as long as the lender allows it. But consider whether you can manage more than one personal loan and the impact it will have on your credit before you start applying.
There isn’t much legislation limiting the number of personal loans you can have, but lenders may limit the number or how much you can borrow. And while they may reject applicants with high debt-to-income ratios, they don’t typically decline applicants solely because of an existing loan.
Each time you take out a loan, you accumulate debt and raise your debt-to-income ratio, or DTI. Having a debt-to-income ratio of 40% or higher can mean you have too much debt, given your income.
The best personal loan helps you reach your financial goal without hurting your credit or resulting in unmanageable debt at high interest rates. Keeping that in mind, consider other ways to get the money you need before turning to another loan.
» MORE: How to manage your personal loan
Applying for another personal loan
There are no federal regulations prohibiting someone from having multiple personal loans, says Carolyn Carter, deputy director of the National Consumer Law Center. Some states regulate the number of payday loans a person can have at once, she says.
The bigger obstacle to getting another personal loan may be qualifying for it.
If your debt is high compared with your income, an obstacle to getting another personal loan may be qualifying for it.
When applying for a personal loan, most lenders consider your debt-to-income ratio, which accounts for all of your debt — including student loans and mortgages — as a portion of your income.
The lender could reject your application, or approve it but at a high annual percentage rate because of your existing debt.
It’s also worth considering the hit your credit score could take when you apply for another loan. Loan applications often trigger a hard credit pull that can temporarily drop your credit 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. (The hard inquiry happens whether your application is approved or not.)
Getting multiple loans from the same lender
Some lenders have a maximum number of loans you can have, a maximum amount you can borrow or both.
If you’ve almost paid off one loan and have a low DTI ratio, you may be approved for another loan.
Having a personal loan from another lender isn’t an automatic disqualification. If you’ve almost paid off one loan and have a low DTI, you may be approved for another loan.
This table shows the number of personal loans some popular lenders will provide to a single borrower:
|Lender||Maximum number of loans||Maximum loan amounts|
|SoFi||One in Michigan, two everywhere else after three consecutive payments toward an existing loan.||$100,000 regardless of the number of loans borrowed.
|LendingClub||Two, but borrower must make payments toward first loan for 3-12 months before taking a second.||$40,000 for one, $50,000 total for two.|
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 loan and a loan for home renovation can both be financially beneficial, but taking them out around the same time can put you further in debt.
If you want to avoid taking another personal loan, here are some alternatives:
Savings: If the expense can be delayed — especially if it’s a discretionary expense — consider saving up for it first. In the meantime, try looking for other ways to make money to pay down your original loan.
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 a year or longer.
Be sure to find out the APR after the introductory period ends, in case you end up making payments past that period.
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.
Secured or co-signed loan: If you’ve determined a personal loan is the best option, you may have a better chance of qualifying if you can put up collateral for a secured loan or have a friend or family member co-sign a loan for you. (This is a major ask; a co-signer is on the hook for the loan, and co-signing can reduce the amount the co-signer can independently borrow.)
Before you move forward with a personal loan, be sure to calculate your monthly payments and consider how they’ll fit into your budget.