You can have more than one personal loan from some lenders or you can have multiple personal loans from different lenders.
You are generally more likely to be prevented from getting multiple loans by the lender than the law. Lenders can limit the number of loans – or the total amount of money – they’ll give you.
They usually don’t turn down applicants just because of an existing loan, but they can turn down your application if you have too many existing debts.
The best personal loan helps you reach your financial goal without hurting your credit or creating unmanageable debt at high interest rates.
With this in mind, consider other ways to get the money you need before you turn to another loan.
Get multiple loans from the same lender
Some lenders have a maximum number of loans you can have, a maximum amount you can borrow, or both.
This table shows the number of personal loans that some popular lenders will give to a single borrower:
Some lenders require a borrower to make a certain number of payments before applying for another loan. LendingClub, for example, requires borrowers to make payments for three to 12 months before getting a second loan. SoFi requires three consecutive payments for an existing loan before reapplying.
Upstart requires borrowers to make six payments on time before applying. First-time borrowers should wait 60 days before reapplying if they repay the loan in less than six months or if they have recently paid off a loan and one of the last six payments was not made on time .
Having a personal loan from another lender is not an automatic disqualification, lenders say. If you’ve almost paid off a loan and don’t have a lot of other outstanding debt, you may be approved for another loan.
Eligibility 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 of payday loans one person can have both, she said.
The biggest obstacle to obtaining another personal loan may be qualifying for it.
“If your debt is high relative to your income, a barrier to obtaining another personal loan may qualify.“
When considering 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 typically look for this number to be around 40% or less.
The lender could reject or approve your request, but at a annual percentage rate, because of your existing debt.
It’s also worth considering the blow your credit score could take when you apply for another loan. Loan applications often trigger a hard credit draw which can temporarily lower your score by a few points.
If you apply for multiple loans in quick succession, the effect on your credit can multiply and you could see a big dent in your score. (The hard investigation occurs whether or not your request is approved.)
Alternatives to personal loans
Personal loans can be a long-term financial commitment and are best suited for large, planned expenses.
For example, a debt consolidation loan and a home improvement loan can both be financially beneficial, but taking them out around the same time can put you in more 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 for it first. In the meantime, try to look for others ways to earn money to pay off your original loan.
0% interest credit card: If you have a good credit score (usually 690 or higher), you may be eligible for a 0% APR credit card that could allow you to fund a large expense without interest for an introductory period of one year or more.
Make sure you know the APR after the introductory period ends, in case you end up making payments beyond that period.
Payment plan: Many doctors, dentists and veterinarians allow patients to work out a payment plan. Some health care providers also do medical credit cards available to help patients with expensive procedures.
Guaranteed or co-signed loan: If you’ve determined that a personal loan is the best option, you may be more likely to qualify if you can post security for a loan. secured loan or have a friend or family member co-sign a loan for you. (This is a large request; a co-signer is responsible for the loan, and the co-signature may reduce the amount the co-signer can independently borrow.)