Multiple loans have logistical and practical limitations. The question is when they might help you and when they may not be your best solution.

Let’s take a look at the ins and outs of multiple loans, answer common questions, discover how you might manage them, and where you can find additional loans if you need one.

Can you take out multiple loans at once?

Yes, it is possible to take out multiple loans simultaneously. Many people have a personal loan, auto loan, and mortgage at the same time, which are all forms of installment loans. However, they aren’t the only type of loan.

Learn more about types of loans before you choose a financial product. Different loans operate in different ways and you may have more options than you realize.

Can you have more than one personal loan?

Yes, if your income can support more than one personal loan and you’ve demonstrated you handle your credit well, you may successfully manage two or more personal installment loans.

How many loans can you have overall?

There’s no set limit to how many loans you can take out. It depends on your financial and life situation and the lenders willingness to grant you credit.

Lenders usually look at how much you earn, your credit score, and your debt-to-income ratio. Every lender sets their own rules regarding what they consider acceptable and their rules aren’t necessarily the same as their competitors. As a result, you could be turned down by one and approved by another.

Alternative lenders also offer products that mainstream lenders don’t. If you want a second or third personal loan, they may be a better option than a traditional bank or credit union.

Can you borrow from the same lender?

Sometimes, but generally lenders won’t grant you a second loan until you’ve paid off your first. Still, some do lend again under certain conditions and with certain stipulations.

As an example, a lender may only consider a second personal loan if your first one has been paid on-time and you’ve passed a specific number of months of repayment. The lender may also limit the maximum amount you can borrow on the second loan as well as how much you borrow overall.

For instance, if you have a loan for $10,000, they may only lend you an additional $5,000 if their overall limit is $15,000 and you’ve paid 24 months of payments on your first loan.

Are there other factors worth considering about multiple personal loans?

Yes, qualifying for multiple loans is only part of the equation. Just because lenders agree to loan you money on a second or even third loan, it doesn’t necessarily mean it is a good idea.

Here are some of the other factors that you should consider before you commit to borrowing again.

  • Potential to lower your credit scores – some lenders use hard credit inquiries that temporarily lower your credit scores. Luckily, some use a pre-approval process and soft credit inquiries that do not impact your credit scores. Check which is the case before you apply.
  • Higher debt-to-income ratio – the more debt you have the more you need to manage your money carefully. Additionally, carrying a lot of debt is often a red flag for creditors and they may be reluctant to offer you more.
  • Higher interest rates – if your credit score drops due to a high credit utilization ratio, lenders may not offer you the best possible interest rate. Consequently, borrowing costs you more money.
  • Riskier – even if your income supports multiple loans, unexpected expenses could throw a wrench into the works. Unless you have a solid emergency fund in place, more than one loan payment could easily become a problem.

Are there benefits to multiple personal loans?

Sure. Another loan may help you if you’re comfortably paying off your first loan, but need extra money to cover a large expense. Each loan can be used for a different purpose and you can track how much you spend on each.

A good example might be borrowing for a wedding when you want to stick to a set budget, rather than throwing expenses on credit cards. Credit cards can be a very expensive way to borrow.

A personal loan could be worth considering if you can get a better interest rate on debt repayment too, providing you don’t have to pay additional fees.

What if you have multiple loans already?

One of the most popular tools for managing multiple debts is a consolidation loan. You take out a single new loan and then pay off all your other debts. If you require more money for another expense, you can add that amount onto your loan too.

Consolidation loans have distinct advantages including simplifying your finances since you only pay one payment. You’re less likely to miss payments and you’ll know precisely when you’ll be debt-free too.

If you choose a good consolidation loan you can also pay extra at any time, without penalty. Good terms can also lead to lower interest rates than you’re currently paying. That may mean paying less interest in the long run.

Perhaps the biggest advantage of consolidating debt is that you could pay a lower monthly payment and boost your credit score. Debt consolidation that pays off credit card bills and other loans often reduces your credit utilization ratio. Making timely payments will also improve your credit history, the biggest factor considered in your credit score.

Nonetheless, if you want to take out multiple loans to make up for a growing gap between your income and your spending, adding additional loans into the equation isn’t going to solve your problem. Contact a credit counselor to discuss your options.

Is it harder to manage multiple loans?

Not necessarily. Even if you have to juggle multiple payments, you can set them up on autopay to ensure you don’t miss one. However, those that aren’t great at budgeting or time management may struggle.

Late or missed payments have a major effect on your credit score. That could impact your finances for years. Still, those that manage their money well can probably manage multiple loans too.

You should also focus on reducing how many loans you have. Start by arranging your loans in descending order based on their interest rates. Choose the loan with the shortest repayment period as your first target. If you earn extra money in any way, direct those funds towards the debt with highest interest rate. Once that’s paid, move on to the next.

Are there cheaper ways to borrow money?

Perhaps, but it depends on your situation. Personal loan interest rates depend on your creditworthiness which is calculated by looking at your income, credit scores, and your existing debt level.

Generally, personal loans offer more value than credit cards since they charge simple, not compound interest. Interest does not accumulate on the unpaid balance. Instead, the lender spreads interest charges across the life of the loan. The interest rate and your payments remain fixed too, making it far easier to budget.

Installment loans are usually a much better choice than payday loans, which have short repayment periods. However, online payday loans may be a good solution if you need quick money for a temporary urgent matter. They are one of the easiest loan forms to qualify for and you can often get your money the same day. However, they aren’t meant to constantly bridge cash flow shortfalls.

Do multiple loans lower your credit score?

If you manage your loans well and pay on time, multiple loans can boost your credit scores. Nonetheless, you shouldn’t apply through lenders that use hard credit inquiries, since that reduces your scores.

It is possible to apply through a loan broker with access to many individual lenders. You complete one application form and the broker does a single soft inquiry on your credit report. Should you go to many individual lenders in a short time and they each do a hard credit inquiry, it will have a negative impact on your credit scores.

How do you know if you can realistically take out multiple loans?

Start by assessing your current financial situation. Use a budgeting app to list all your creditors, outstanding balances, interest rates, and payments. This will give you a good idea of whether you have the funds to support another loan.

If so, you should create a budget and move onto the application process. Be careful to choose a method that does not impact your credit scores.

Best method to access multiple loans

The fastest way to borrow money starts with a single application form. FlexMoney connects you to an extensive network of lenders that cater to a variety of borrowers.

The process is safe and easy and our soft credit inquiry does not impact your credit score. You may qualify for online personal loans or debt consolidation loans from more than one source.

Compare interest rates and terms and find the best possible loan for you in just a few minutes. If you’re struggling to obtain credit elsewhere, FlexMoney is the best alternative lending platform in the U.S. Get easy personal loans online of between $200 and $35,000 today.