How Many Personal Loans Can You Have at Once?
If you already have one personal loan, you can take out as many additional loans as lenders are willing to give you. Although there are no laws restricting the number of loans you can have at once, lenders tend to have individual policies limiting the number of loans and amount of money they will allow you to borrow.
There are downsides to taking on more than one personal loan, even beyond the additional monthly payment. Depending on your situation, you may qualify for better, less expensive alternatives to borrow the money you need.
How many loans can you have?
You can have as many loans as lenders will approve for you, but there are practical limitations. The more personal loans you have, the harder it will be to qualify for another loan. Every time you take out a loan, you’ll increase your debt-to-income (DTI) ratio. Lenders are more likely to approve applications from people with low DTI ratios and good credit, and many limit the dollar amount and number of loans they will give to one person.
Can you get two loans from the same bank?
Yes. Many banks and lenders will allow you to take out more than one loan, but they typically have limits.
These are a few lenders that cap the number of loans or amount of money you can borrow. Be sure to check the fine print or ask a lender directly if they aren’t on this list and you want to know their limits.
| Lender | Active personal loan limit | Maximum personal loan limit by amount |
|---|---|---|
| Best Egg | 2 | Not disclosed |
| LendingClub | No limit | $40,000 |
| Prosper | 2 | Not disclosed |
| Rocket Loans | 1 | $45,000 |
| SoFi | 2 | Not disclosed |
| Upstart | 2 | Not disclosed |
Can you take out two loans from different places?
Yes, you can take out loans from different lenders. There are no laws against it. That said, it will be up to each lender to decide whether to approve you for a loan. Lenders will base your eligibility for a personal loan and your loan terms on factors like your credit, income and DTI ratio. If you’re struggling to make payments on your current loan, your DTI ratio is likely high and your credit will take a hit, making lenders less likely to give you an additional loan with a decent interest rate.
Should you get another personal loan?
Getting another personal loan will give you access to the money you need right away, but there are downsides. You should only get another personal loan if:
- You can afford the monthly payments. Missing or inconsistent payments will damage your credit, making you less likely to get good interest rates (or qualify for loans, including mortgages) in the future.
- It’s the best option to get you the money you need. There are several alternatives to personal loans for people in different financial situations. If you don’t need a lot of money upfront or if you anticipate a series of large expenses, look into other options like credit cards or personal lines of credit.
Tip: Use our personal loan calculator to help you estimate your monthly payments.
Pros and cons of having more than one personal loan
| Pros | Cons |
|---|---|
Access to a large sum of money upfront Ability to pay off debt over time Positive impact to credit if you pay off monthly payments on time | Additional monthly payment Negative impact to credit from hard credit inquiry Higher DTI ratio Higher interest rates on new loan Possible origination fee with each loan |
What are personal loans used for?
Though you can use them for whatever expense you need to cover, personal loans are often used for debt consolidation, credit card refinancing, home improvement and emergency expenses. It’s not ideal to take out more than one personal loan at a time, but it may be your best option if you’re hit with a large emergency expense after taking out your first loan. For smaller purchases or ongoing large expenses, consider alternatives.
Are personal loans bad?
Personal loans can be useful, but there are downsides to consider before taking on more debt. Here are some of the drawbacks of having more than one loan at a time:
- Impact to credit from hard credit inquiry. Every time you apply for a loan or credit card, the lender will run your credit with a hard credit pull. Hard pulls result in your FICO score dropping, typically by 5 points or less. The hard pull will remain on your credit report for two years.
- Higher DTI ratio. Your debt-to-income ratio will go up every time you take on new debt. Having a high DTI ratio may prevent you from qualifying for additional loans, including mortgages. Lenders also use your DTI ratio to determine interest rates, so if you do qualify for a loan, you’ll likely have a high APR. This will make paying off your loan more expensive over time.
- Higher interest rates on new loans. Since lenders use your debt-to-income ratio to determine your APR, having any outstanding personal loans means that interest rates you’ll pay on a new loan will likely be higher.
- Additional monthly payment. You’ll be responsible for an additional monthly payment, so it’s important to first determine whether you can afford it using a personal loan calculator.
How to get another personal loan
You’ll follow the same process to get a second personal loan as you did the first time you applied. Typically, you’ll need to apply for a personal loan again, even if you’re applying for a loan from the same lender.
Lenders will determine your eligibility for an additional loan based on several factors, including:
- Your DTI ratio. Your debt-to-income ratio helps lenders determine whether you can afford to make your monthly payments. They’ll use this metric to decide whether you qualify and to determine your interest rate. The higher your DTI ratio, the higher your interest rates are likely to be.
- Your credit history/score. When the lender performs a hard credit inquiry, they’re looking into your credit history and credit score to decide if you’re a responsible borrower. If you have a high score and a history of making on-time payments, lenders will be more likely to approve your loan.
- Your income. Lenders use your income to help them determine whether you’ll be able to afford to pay off your loan. You’ll likely have to submit proof of income in the form of pay stubs or tax returns.
Alternatives to personal loans
| Alternative | What is it? | Best for |
|---|---|---|
| Credit card | A line of credit that allows you to borrow money from a bank up to your credit limit and pay it back at a variable APR | People who need to finance regular, everyday expenses like bills or other purchases under $1,000. Cardholders may earn rewards or sign-up bonuses for everyday spending. |
| 0% APR credit card | A credit card that gives you a set period of time, usually between 12 and 21 months, to pay off any purchases you make without paying interest | People who can afford to pay off a large expense within 21 months. To qualify for a 0% APR credit card, you’ll need good or excellent credit. |
| Personal line of credit | Ongoing access to money that you can borrow from up to your credit limit | People who need access to funds for large ongoing expenses like medical care or extensive home improvement projects |
| Home equity loan or HELOC | Money borrowed against equity (or ownership) in your home | People who have a lot of equity in their home and who want low interest rates |
| 401(k) loan | Money borrowed against your retirement plan | People with bad credit who don’t want to pay high interest rates |
Check out our guide to personal loan alternatives to learn about additional options that may better fit your financial situation.
How much debt is too much?
You’re in too much debt when you can’t afford to pay it off. Ideally, your debt-to-income (DTI) ratio should be below 35%. A low DTI ratio will ensure that you can afford your monthly payments. If your DTI ratio exceeds 43%, you may not qualify for personal loans, and you won’t be eligible for a qualified mortgage. If you do qualify for a loan or mortgage, your interest rates will be high, meaning you’ll spend more money to pay back the same debt.
Tip: If you want to get out of debt, consider getting a credit counselor or making a debt management plan to get back on track.