{"id":14553,"date":"2021-12-05T17:35:36","date_gmt":"2021-12-05T17:35:36","guid":{"rendered":"https:\/\/www.loanry.com\/blog\/?p=14553"},"modified":"2022-10-09T14:12:40","modified_gmt":"2022-10-09T14:12:40","slug":"how-many-loans-can-you-have","status":"publish","type":"post","link":"https:\/\/www.loanry.com\/blog\/how-many-loans-can-you-have\/","title":{"rendered":"How Many Loans Can You Have?"},"content":{"rendered":"

[vc_row][vc_column css=”.vc_custom_1665323170506{margin-top: 1em !important;}”][vc_column_text]\"\"[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column css=”.vc_custom_1639743501958{margin-bottom: -1.2em !important;}”][vc_column_text]It happens to people all the time. You think you need one amount of money but soon discover that amount isn\u2019t enough for what you need. Maybe you\u2019ve been sick a lot lately and missed work. Now, your electricity bill is due and you have no way to pay. You get a loan to cover that bill, but the next day you receive a disconnect notice for your water bill.<\/p>\n

Or maybe you took out a loan to cover some necessary repairs to your bathroom. And \u2013 as per usual \u2013 once you dig in you find that you need more repairs than you knew. This has happened at our house\u00a0dozens of times.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column css=”.vc_custom_1639743514521{margin-top: -1.3em !important;margin-bottom: -1.2em !important;}”][vc_column_text]<\/p>\n

How Many Loans Can You Have<\/h2>\n

For whatever reason, you now need more money than your original loan can cover, but you have no other way to cover it. What do you do? Can you even get another one since you already have one? How many loans can you have at one time?<\/p>\n

The good news is that you can get more than one loan at a time. There is no cap on the number of loans you can get, but there are other facts that determine how many loans you can have at once.<\/strong> Let\u2019s take a look.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column css=”.vc_custom_1639743530048{margin-top: -1.3em !important;margin-bottom: -1.2em !important;}”][vc_column_text]<\/p>\n

Lender Restrictions<\/h2>\n

While there is no set number of\u00a0loans you can have in total, each lender often has\u00a0its own cap<\/strong>. In some cases, they set a maximum number of loans you can receive from them. A common cap is two loans from that lender. For some, it\u2019s only one loan.<\/p>\n

Other lenders have no cap for the number of loans, but they set a maximum amount you can borrow. For example, they might not loan one customer more than $10,000 at a time. However, that $10,000 could be spread over multiple loans.<\/p>\n

Additionally, individual lenders might have other requirements. For instance, a lender might allow you to borrow up to $10,000. However, they may require that you make a certain number of payments on your first loan before applying for another.<\/p>\n

Individual lender restrictions do not regulate the total number of loans you can have. You can apply for loans from other lenders even if you have reached the cap of an individual lender<\/strong>. However, there are other factors they consider, such as those below.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column css=”.vc_custom_1665324071291{margin-top: -0.7em !important;}”][vc_column_text]<\/p>\n

\u261b<\/span> Type of Loan<\/h3>\n

Again, there is no set cap on the number of loans you can have at once \u2013 normally. However, some types of loans are regulated.<\/p>\n

For example, payday loans<\/a> are considered predatory loans and are highly regulated by law. Some states will not allow a person to have more than two or three payday loans at once.<\/strong><\/p>\n

Additionally, loans from banks are regulated. As the FDIC is involved with banks, they set a limit on how much one borrower can take out at once from that specific bank.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_single_image image=”14567″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column css=”.vc_custom_1665324239890{margin-bottom: -1.2em !important;}”][vc_column_text]<\/p>\n

☛<\/span>Ability to Pay<\/h3>\n

\nWhether you have one loan or 20, each lender wants to know that you can afford to repay the loan. This goes beyond just looking at your income.<\/p>\n

Every time you apply for a loan, the lender will take your DTI or debt-to-income ratio into account. This means comparing how much you make to how much you owe out \u2013 AKA your debt. And this ratio can impact your approval odds quickly. <\/strong><\/p>\n

Let\u2019s say you applied for a loan and you were approved with ease. You decide to apply for another loan a week later but are denied. Why? Neither your credit score nor your income has changed.<\/p>\n

It’s simple. Your first loan added to your monthly debt, meaning that your DTI changed. Each loan you have impacts your DTI, and each lender has its own guidelines concerning DTI. So while there is no cap on the number of loans you can have, your DTI can prevent you from being approved.\n<\/p>\n

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☛<\/span> Credit Score<\/h3>\n

\nAs with your DTI, your credit score can change with every single loan you have and apply for. Each time a lender runs your credit, it leads to a hard inquiry.<\/p>\n

These hard hits can bring your credit down by a few points, and it can take some time for your score to rise back up. Therefore, each time you apply for a loan, it may impact your ability to get a loan the next time.<\/p>\n

There is, however, one saving grace to this. If you apply for the loans within a short period of time \u2013 usually within two to four weeks \u2013 and it\u2019s the same type of loan, you\u2019ll only get one hit.<\/strong><\/p>\n

For example, if you apply for a mortgage loan<\/a> through three separate lenders in one week, your credit score will only be dinged once. However, if you apply for a mortgage loan, wait a month, and then apply for a new one, you\u2019ll get a ding for each time.
\nLikewise, if you apply for a mortgage loan, auto loan, and personal loan, your score will get dinged three separate times. This is the case even if you apply for all of them on the same day.\n<\/p>\n

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How Many Loans Should You Have at Once?<\/h3>\n

Here\u2019s the thing: you shouldn\u2019t strictly go by the guidelines, caps, and requirements set forth by lenders<\/strong>. These are just generalizations and do not take every part of your life into consideration.<\/p>\n

In other words, just because you can borrow $10,000 doesn\u2019t mean you should. You have to be your own financial consultant here. Before you take out several loans, ask yourself:<\/strong><\/p>\n