Personal loans are a versatile financial tool that can help you cover a range of expenses, from consolidating debt to funding a major purchase. But what happens when you find yourself needing more than one personal loan? Is it possible to have multiple personal loans at the same time, and if so, how many?

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The truth is you can have more than one personal loan at a time, but you’ll need to qualify for it first. Approval will depend on your income, credit card balances, and other information on your credit report, like your payment history.

How many personal loans can you have at once?

Technically, there’s no universal limit to the number of personal loans you can take out. However, the more personal loans you have, the harder it becomes to qualify for another loan.

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Some obstacles you may face while trying to take out multiple loans include:

• Lender policies: Lenders want to recoup their investment. To ensure they can, they may mitigate the risk of default by implementing rules about how many loans you can have with them at once. Some may allow multiple loans if you’ve demonstrated a strong repayment history, while others may restrict you to one loan at a time.
• Your financial profile: Lenders assess your credit score, debt-to-income (DTI) ratio, and income to determine your eligibility. Each new loan increases your DTI and impacts your credit score—reducing your chances of approval.

What to consider before applying for multiple loans

Strategically leveraging multiple loans can:

• Give you access to more funds: If you need additional money for a different purpose, a second loan can help bridge the gap.
• Allow you to consolidate debt: A second loan can sometimes be used to consolidate multiple debts into one manageable payment.
• Help you build a credit history: Successfully managing multiple loans can improve your credit profile.

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However, before increasing the number of loans you're tied to, it's important to consider:

• Approval challenges: A higher DTI ratio from existing loans can make it harder to qualify for new loans. If you do qualify, you'll likely face a much higher interest rate.
• The debt burden: Managing multiple loans increases your monthly obligations and overall debt load. Plus, depending on the loan amount, you could pay thousands in interest on top of what you borrowed.
• The hit to your credit score: Each time you borrow money, it has an impact on your credit score. For example, if your income remains the same, your debt-to-income ratio will increase after taking out a personal loan. This might make it more challenging to borrow money in the future, as a higher DTI ratio indicates you might be stretched thin financially.
• Financial vulnerability: Having debt is stressful. Adding another monthly payment can increase your overall financial risk. Things happen like illness, job loss, or other unforeseen circumstances.

Tips for managing multiple loans

If you’re considering taking out more than one personal loan, here are some strategies to ensure you stay on top of your finances:

• Check your credit report: Make sure your credit is in good standing. You can visit Annualcreditreport.com to view a copy of your credit report. Once you access your report, look through it carefully to ensure the information on your report is accurate. Also, pay attention to the adverse accounts section. That's where you'll see if you have any accounts currently in collections. If you do, take the steps to rectify those accounts.
• Calculate your DTI: Before applying for another loan, evaluate your current DTI. Lenders typically prefer a ratio below 36%, though some may offer loans for higher debt to income ratio borrowers, depending on the credit profile.
• Reduce your debt (if possible): Eliminate smaller debts, like a high-interest credit card balance or buy now pay later installment loan.
• Shop around: When looking for personal loans, you can leverage your existing lender or work with a new one. It's best to shop around for the best rates and terms, and prequalify where possible.
• Consider adding a co-signer: A co-signer with a good credit score can help you get approved for a loan if you aren't able to on your own. They may also help you score a more favorable rate, reducing your overall interest and monthly payments.
• Avoid loan stacking: Loan stacking refers to taking out multiple loans within a short period. This can lead to overwhelming debt and make repayment unmanageable.
• Consider alternatives: If you're struggling to meet your financial needs with one loan, explore alternatives like home equity loans, home equity investments, or retirement savings.

Alternatives to personal loans

If you need access to cash, but may not be prepared to take on an additional personal loan, consider exploring:

• Balance transfer cards: This moves high-interest credit card debt to a card offering a low introductory interest rate for a specific period of time. Remember, balance transfer cards often come with fees, but the savings you get from a lower interest rate can be worth it.
• Home equity loan: If you're a homeowner with sufficient equity, you can access a lump sum of cash using a home equity loan. You will make equal monthly payments over a set period of time agreed upon by you and the lender. Interest rates are generally lower than personal loans and credit cards, which may reduce your overall costs.
• Home equity investment (HEI): An HEI is another way to tap into your equity for a lump sum of cash. There are no monthly payments over a flexible 30-year term. Instead, you share an agreed-upon portion of your home's future appreciation when you refinance, sell, or use another source of funds. To qualify, you need a credit score above 500 and sufficient equity—there are no income or DTI requirements.  
• Home equity line of credit (HELOC): A HELOC works similarly to a credit card. You're approved to borrow up to a certain limit and only draw on your line of credit when you need it. Your lender will set the terms of your line of credit, but your monthly payments will vary.
• 401(k) loan: A 401(k) loan allows you to borrow from an eligible 401(k) account. You'll repay the loan over a 5-year term through standard payroll deductions. Although you'll pay interest on the loan, the interest is paid to your account. Before considering leveraging your retirement savings, it's best to consult a financial advisor.
• 401(k) hardship withdrawal: If you have a qualifying hardship and 401(k) account, you can take from your retirement savings to cover the expenses. Hardship withdrawals do not have to be repaid, which can be a double-edged sword. On the one hand, you'll find financial relief. On the other hand, you'll risk a serious retirement shortfall if you can't make up catch-up contributions.

Frequently asked questions

How many personal loans can I have?

There is no specific limit to the number of personal loans you can have. However, each lender will consider your current loans, monthly payments, income, and more when deciding whether or not to approve you.

Can I get a second personal loan with the same lender?

Yes, some lenders allow borrowers to take out multiple loans, provided you meet their requirements and demonstrate the ability to repay.

Can I take out a personal loan if I already have one?

Yes, you can take out a personal loan even if you already have one, as long as you meet the lender’s criteria and can handle the additional financial responsibility.

Does having multiple loans hurt my credit score?

Having multiple loans can impact your credit score, especially if you’re carrying high balances or missing payments. However, timely repayments can mitigate negative effects and even improve your credit score over time.

What happens if I can’t manage multiple loans?

If you’re struggling to keep up with payments, consider options like debt consolidation or refinancing. Speak with your lenders to explore flexible repayment options.

Final thoughts

While there’s no hard-and-fast rule about how many personal loans you can have, managing multiple loans requires careful planning and financial discipline. If you want to get more than one personal loan, you can – depending on your current income, credit score, and debt-to-income ratio. Having an excellent credit score and reliable income can help in securing more than one personal loan.

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Always evaluate your ability to repay before taking on additional debt, and explore alternatives to ensure you’re making the best decision for your financial future. By staying informed and proactive, you can use personal loans to achieve your goals without compromising your financial stability.

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Are you looking to get your finances back on track? Or have a large expense to cover? Learn how you can do so without monthly payments or debt-to-income ratio requirements by visiting Point.com. Point's Home Equity Investment can help you tap into your home equity to accomplish what you need.