Can I have more than one personal loan?
If you already have a personal loan, you can certainly apply for another one. However, it’s worth noting that individual lenders will have their own policies about the number of personal loans they offer to the same customer. So there may be some limitations there. A lender will also take into consideration debts you have with other lenders when assessing your loan application.
Why do people take out multiple personal loans?
Taking out multiple personal loans can be a good idea in certain situations, depending on your financial goals and needs. Here are some scenarios in which taking out multiple personal loans may make sense:
- Emergency expenses: in times of unexpected financial hardship, multiple personal loans can provide the necessary funds to cover medical bills, car repairs, or other urgent expenses. Having access to multiple sources of credit can be a financial safety net.
- Home improvement: if you need to make significant home improvements or repairs, multiple personal loans can be used for different projects, allowing you to maintain or increase the value of your property. Home improvements can also lead to potential capital gains and enhance your living situation.
- Starting a business: entrepreneurs often require multiple personal loans to fund various aspects of their star-tup, such as initial inventory, equipment, marketing, and working capital. These loans can help you launch and grow your business.
- Diversified investment: some individuals use personal loans to invest in opportunities with potentially higher returns, such as real estate or stocks. While this carries risks, it can be a strategic financial move if done wisely.
Taking out multiple personal loans can be a useful financial strategy in specific circumstances, but it should be done thoughtfully and in line with your long-term financial goals.
How many personal loans can I have at once?
In theory at least, if you meet a lender’s criteria, and your income is sufficient to cover the repayments on multiple personal loans, there is no legal limit on the number of loans you can have.
However, there are downsides to having lots of personal loans at once. Including potential damage to your credit score and the risk of getting into serious financial trouble if you have unmanageable debt. Our Personal Loan Repayment Calculator can help you understand how much a new loan could cost you.
→Related article: How to Fix a Bad Credit Score
Is it a good idea to have multiple loans?
Having multiple personal loans is a financial decision that should be made carefully and based on your individual circumstances and needs. It’s not inherently good or bad to have multiple personal loans, but there are several factors to consider before taking on additional debt.
Consider the reason for taking out multiple personal loans. Are they for essential needs like medical expenses or education, or are they for non-essential purposes like vacations or luxury items? Prioritise loans that serve critical needs and carefully evaluate the necessity of others.
The main risk when taking out multiple loans is financial overextension. Just because you may be approved for another loan, doesn’t mean you can afford to pay it off in the long run. Determine whether you can comfortably afford the monthly payments on multiple loans. Calculate your total monthly debt obligations, including the new loans, and ensure that your income can cover these expenses without causing financial strain.
If you’re considering taking out multiple personal loans, it’s a good idea to consult with a financial advisor who can provide personalised guidance based on your specific financial situation. They can help you assess the risks and benefits and develop a plan to manage your loans effectively.
About the author of this page
This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.