How Many Personal Loans Can You Have at Once?
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There’s technically no limit to how many personal loans you can have at once, but that doesn’t mean it’s a good idea to borrow money left and right. While there are plenty of lenders who will issue you more than one personal loan, you should have a realistic plan for how you’ll pay back the debt anytime you decide to take out a new loan.
- Can you have multiple personal loans at once?
- Can you get multiple personal loans from the same lender?
- Check restrictions on personal loans before applying
- 5 things to think about when applying for multiple personal loans
- Can multiple personal loans make sense?
- How to boost your chances of getting approved for a second loan
Can you have multiple personal loans at once?
Yes. Many lenders allow multiple outstanding personal loans, and you can take out a personal loan from multiple banks or online lenders.
Can you get multiple personal loans from the same lender?
Each lender has its own policies regarding personal loans. Some have limits on the quantity or the total amount borrowed, while others do not. Keep in mind that even for lenders that allow a second personal loan, you may not be approved if outstanding debt is negatively impacting your credit score.
Here are a few lenders that let you take out multiple personal loans:
Only preapproved cardmembers are eligible to take out a personal loan from American Express, and if you’re preapproved, you’ll see an offer in your account. As long as you have an offer, you can apply for a new loan, even if you already have multiple loans outstanding. There’s no maximum number of loans or maximum amount when borrowing from American Express.
You’re allowed to have up to two outstanding loans from Best Egg, but the lender requires your first loan to be open for six months before you apply for a second one. The combined balances of both loans can’t be more than $50,000, and Best Egg will also look at factors like your payment history when determining whether you’re eligible for a second loan.
It’s possible to have up to three personal loans from Discover at once. However, you’ll need to wait 12 full billing cycles after your last loan origination before you can apply for a new loan, and you can’t have more than $35,000 in outstanding loans from Discover at any time.
You’re allowed to have up to two personal loans through LendingClub simultaneously, but the total amount can’t exceed $50,000. The peer-to-peer lending marketplace also requires you to make three to 12 months of on-time payments in a row for your existing loan before you’re eligible for a new one. Your specific requirements will depend on factors like the term and balance of your loan.
Marcus by Goldman Sachs®
With Marcus by Goldman Sachs, you can have up to two loans outstanding at any time, with a maximum of $40,000 on each loan. While the lender recommends waiting three months from the origination of your first loan before applying for a second, there’s no required waiting period; you could apply for a second loan the next day if you needed to.
You can take out a second personal loan from Prosper, but you’d need to wait nine months after you accept the first one before you can apply again. The total loan limit will be $40,000, so your second loan will be capped if you have an outstanding balance already.
SoFi can issue you a second personal loan, but you’ll need to make three consecutive, on-time payments on your existing loan before you can qualify. However, Michigan residents are only allowed to have one outstanding loan from SoFi at a time.
In order to get a second Upstart personal loan, you’ll need to make the scheduled payments on your existing loan for six consecutive months. You also can’t have more than $50,000 in outstanding principal from Upstart or more than one outstanding loan from Upstart to qualify, for a maximum of only two outstanding Upstart loans. You’ll need to wait 14 days for your sixth payment to clear before applying, and you’ll also need to use a different email address for your second Upstart loan.
Check restrictions on personal loans before applying
If you’re researching lenders and want the option of picking up a second personal loan in the future, you’ll want to contact the lender directly or seek out information on how many personal loans you can have at once on their website. Different lenders have different restrictions.
Wells Fargo and Earnest, for example, don’t have any limits on the number of personal loans you can have at one time. Others like Laurel Road and Rocket Loans only allow you to have one outstanding loan. And you may find some lenders like Avant and LightStream don’t provide details about their loan policies online — that’s where contacting the lender directly can come in handy.
5 things to think about when applying for multiple personal loans
- Your credit will be affected. Applying for a new loan will result in a hard inquiry, which causes a dip in your credit score. While inquiries only make up 10% of your FICO Score, they can have a significant impact if you’ve only recently established credit. The more inquiries, the greater the risk of a low credit score. Carefully consider your credit score before taking out a second personal loan.
- Your debt-to-income ratio will increase. Not only will the amount you owe have an impact on your credit score, but it may also make you ineligible for a new loan. To calculate your debt-to-income ratio, divide your total monthly debt payments by your gross monthly income and multiply the answer by 100 to get the percentage. Typically, lenders won’t issue you a mortgage loan if your debt-to-income ratio is higher than 43%. There are some exceptions, but if you’ll need to borrow again in the future, you should be careful not to drive up your debt-to-income ratio too high.
- You might get a higher interest rate on your second loan. If your credit score is worse than it was when you applied for your first personal loan (which it likely will be — you’ve taken on more debt, and that’s after incurring a hard inquiry), the lender will see you as a greater risk than when you applied for your first loan. That means you could get stuck with a high APR that could make the loan difficult to repay.
- You might fall into a debt trap. Juggling multiple debts can cause financial stress and strain on your income. The more of your money you put towards debt repayment, the less you’ll have to cover your monthly expenses. If you start falling behind on your bills and borrow more just to keep up with costs, you could end up stuck in an insurmountable cycle of debt.
- A second loan could leave you even more financially fragile. You may have enough income to cover multiple monthly payments now, but what if you experience a drop in income, job loss or another setback? Having outstanding debt leaves you vulnerable to these unexpected events.
Can multiple personal loans make sense?
There are certain situations where it makes sense to take out multiple personal loans. For example, if you already took out a personal loan to consolidate credit card debt, but you’re now facing unexpected expenses like auto repairs, it might make sense to apply for a second loan. Or, if you took out a personal loan for a large expense like a wedding, and you now need to cover the cost of home remodeling so you can sell your home at a higher value, it might make sense to take out another loan for that purpose. However, you should never borrow more than you can afford to pay back.
How to boost your chances of getting approved for a second loan
- Check your credit report. Before you apply, assess your chances of getting approved by looking at recent changes to your credit score.
- Stay on top of your payments. Some lenders require a number of consecutive, on-time payments before you can be approved for a second loan. Even for those who don’t, a history of on-time payments will help your odds of approval.
- Pay off other debts. The more you can reduce your debt-to-income ratio, the better. Try paying off all your credit cards before applying for a second personal loan.
- Increase your income or keep it steady. At the very least, you should maintain a steady income. If you’re struggling to keep up with your expenses and pay off your debts, it might be a good idea to get a second job or side hustle to help you get back on track financially.
- Don’t overborrow. Calculate exactly how much money you need and how much you can afford to pay back, and don’t ask for too much.
- Consider a cosigner. If your credit score has dropped since you applied for your first loan, consider asking someone with excellent credit to cosign on a loan for you. You’ll get approved for a loan with a lower interest rate, which means you’ll be able to pay it back faster.
- Find the best lender for you. Some lenders focus on loans for specific purposes, some are geared toward people within a certain credit range and some others have specific requirements. Finding the lender that is the best fit for you will help you improve your approval odds.