You can have more than one personal loan with some lenders, or you can have multiple personal loans with different lenders.
In general, you are more likely to be blocked by the lender for getting more loans than the law. Lenders can limit the number of loans – or the total amount of money – they will give you.
Not only do they typically turn down applicants because of an existing loan, but they can decline your application if you have too many existing debts
The best personal loan will help you achieve your financial goal without hurting your credit or creating uncontrollable debt at high interest rates.
Keep that in mind and consider other ways to get the money you need before switching to another loan.
Getting multiple loans from the same lender
Some lenders have a maximum number of loans you can get, a maximum amount you can borrow, or both.
This table shows the number of personal loans that some popular lenders will make to one borrower:
Some lenders require a borrower to make a certain number of payments before applying for another loan. For example, LendingClub requires borrowers to pay for three to 12 months before getting a second loan. SoFi requires three consecutive payments on an existing loan before you re-apply.
Upstart requires borrowers to make six timely payments before applying. Novice borrowers should wait 60 days before applying again if they pay off the loan in less than six months or if they recently paid off a loan and one of the last six payments was not on time.
Having a personal loan from another lender isn’t an automatic disqualification, lenders say. If you are about to pay off a loan and don’t have many other existing debts, you can be approved for another loan.
Qualify 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 payday loans a person can have it right away, she says.
The bigger obstacle to getting another personal loan can be qualifying for it.
If your debt is high compared to your income, an obstacle to getting another personal loan can qualify for it.
When assessing a loan application, most lenders consider your debt-to-income ratio, or DTI, which represents all of your debt as a portion of your income.
Every time you take out a loan, you increase your DTI. Lenders usually seek that number to be about 40% or less.
The lender can reject or approve your application, but at a high level annual percentage, because of your existing debt.
It’s also worth considering how high your credit score could be when applying for a new loan. Loan applications often lead to a hard credit which can temporarily drop your score by a few points.
Applying for multiple loans in quick succession can increase the effect on your credit and you could see a major dent in your score. (The difficult investigation happens whether your application has been approved or not.)
Alternatives to Personal Loans
Personal loans can be a long-term financial obligation and work best for large, planned expenses.
For example, a debt consolidation loan and a home renovation loan can both be financially beneficial, but taking them out around the same time could put you in further debt.
If you want to avoid taking out another personal loan, here are some alternatives:
Savings: If the expense can be delayed – especially if it’s a discretionary expense – consider saving first. In the meantime, look for others ways to make money to pay off your original loan.
0% interest credit card: If you have a good credit score (typically 690 or higher) you may qualify for one 0% APR credit card which allows you to finance a major expense interest-free for an introductory period of one year or more.
Make sure to find out the APR after the introductory period ends, in case you make payments after that period.
Payment plan: Many doctors, dentists, and veterinarians let patients work out a payment plan. Some medical providers also make medical credit cards available to help patients with expensive procedures.
Secured or countersigned loan: If you have determined that a personal loan is the best option, you may have a higher chance of being eligible if you can provide collateral for a secured loan or have a friend or family member co-sign a loan for you. (This is an important question; a co-signer is on the hook for the loan, and countersigning can reduce the amount the co-signer can borrow independently.)
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