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How Many Personal Loans Can You Have At Once?

5-Minute ReadSeptember 16, 2022


When applying for a personal loan, you’re sometimes borrowing based on only an estimate of how much you may need. If your calculations were off, you may realize you needed more than what you have borrowed after all.

Or maybe you were able to get the loan you needed, but another unplanned expense came up and you suddenly need the money to cover that as well. In some cases, you may be able to take out additional personal loans to cover these costs, though you should evaluate your financial situation before making that kind of commitment.

The article below will explain the requirements for taking out multiple personal loans, and inform you of the risks involved in taking on that additional debt.

How Many Personal Loans Can You Take Out At Once?

A personal loan can serve many purposes, and can help you pay for planned and unplanned expenses alike if you can meet a lender’s credit requirements. If your credit score and debt-to-income ratio (DTI) were enough to get you one personal loan, is there anything stopping you from trying to get a second?

Some lenders may give the option of having two or more personal loans out at once. It depends on each lender’s specified limitations. All of your loans don’t need to come from the same lender, either. If one won’t let you apply for a second loan, you could potentially borrow it from another.

While the application process is still relatively the same, taking out a second personal loan isn’t always just a matter of applying again. Many lenders require that a certain amount of monthly payments are put toward your existing loan before they’ll consider loaning you another one.

Being approved for another personal loan will largely depend on how much you have left to repay on your current loan, as that will factor into your DTI and credit report. If your existing loan is nearly paid off and you don’t have a lot of other debt, you may be able to get approved for one or more additional personal loans.

Rocket LoansSM will only approve borrowers for one personal loan at a time.

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How To Manage Multiple Personal Loans At Once

Managing two or more personal loans and their repayments can be tricky, but it’s not impossible.

The best way to pay off debt, especially if you have multiple loans out, is to target your high-interest repayments first. This can help you save money in the long run by relieving yourself of high interest charges every month.

Missing a payment or defaulting on a personal loan can also affect your credit score and make it harder to take out future loans, so if you can afford to do so, you should prioritize those payments. Setting up automatic payments can also be helpful in ensuring you don’t miss any.  

Should You Take Out Multiple Personal Loans At Once?

There are certain risks involved when juggling multiple outstanding loans. Consider the following ways having multiple loans out can affect you:

  • It can hurt your credit. Taking out multiple loans means having a hard inquiry done every time you apply. Every hard inquiry can lower your credit score by up to 10 points. You also risk seriously hurting your credit score if you miss any payments or default.
  • You could increase your DTI. Your DTI measures your debt against how much money you earn, and is an important factor in determining your eligibility for a mortgage and other types of loans. A higher DTI can lead to having higher interest rates on any future loans you take out.
  • Your debt can keep building up. Beware of falling into a debt cycle where you keep taking out loans in order to keep up with your monthly payments. The more money you’re putting toward your repayment, the less you may have for your bills and other life expenses. If you have to borrow another loan just to keep up with those, that can put you further down into a hole of debt.

All that being said, if you can qualify for low interest rates and have the income to keep up with multiple debt repayments, and if you absolutely need the money, you could consider taking out another loan.

Otherwise, unless you can afford to repay multiple outstanding debts, you may be better off finding an alternative solution.

Personal Loan Alternatives

Having multiple personal loans might not work for everyone. Let’s take a look at some other financing options that may be available to you.

  • Home equity loan: As with a personal loan, the funds from a home equity loan can be used for various purposes. The drawback is that you’re borrowing against the equity in your home, and a default could cause you to lose your home to foreclosure.
  • HELOC: Similar to a home equity loan, a home equity line of credit (HELOC) allows you to borrow against your home’s equity and repay it as you go. It comes with similar risks as a home equity loan, though, including the possibility of losing your home.
  • 0% Introductory APR credit card: Some credit card companies offer 0% APR introductory periods when you sign up for a new card. These periods typically last 12 – 18 months, during which you can repay your debt interest-free. Once the promotional period ends, though, you can be subject to the higher interest rates typical of most credit cards.
  • Emergency funds: If you’ve built up a healthy emergency fund and can spare the money, it may be simpler to just pull from your savings to cover your expenses. The downside to this is that you then wouldn’t have that money available if you needed it later.

FAQs About Having Multiple Loans Out

Can you take out two or more loans from the same bank?

This depends on the bank or lender’s specific policies. Some lenders allow you to have multiple outstanding loans while others don’t. Often a bank or lender may require you to have contributed a certain amount toward your current loan before you can qualify for another. Some institutions like Rocket Loans will only approve borrowers for one personal loan at a time.

How long should you wait before applying for another loan?

Again, this can depend on your bank or lender’s policies. Many lenders require you wait at least 3 – 12 months (i.e., make 3 – 12 monthly payments toward the loan) before you may apply for another.

Is taking out multiple personal loans bad?

Having multiple personal loans out isn’t inherently a bad thing, unless you have trouble making your monthly payments on time. Missed payments or a default can seriously hurt your credit score. More loans can also mean a higher DTI for you, potentially affecting your rates on future loans you take out.

The trickiest part of having multiple loans out can be remembering what payments are due when. Debt consolidation can help to simplify this by ensuring you only have one monthly payment to worry about.

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Final Thoughts

Unplanned emergency costs are just that – unplanned. You could take out a personal loan only to realize that you need another for new expenses, or because you didn’t borrow enough the first time. If you’re sure you could qualify for low rates again and won’t have trouble making payments, you could try taking out another loan on top of your existing one. Just be mindful of the risks involved, as well as your lender’s stipulations for borrowing a second loan from them.

If you think a personal loan can help you consolidate your existing debt, apply online today with Rocket Loans and see what rates you may qualify for.