How Many Personal Loans Can I Have at the Same Time? (2024 Guide)

While there’s no official limit to how many personal loans a consumer can have at one time, many banks, credit unions and other lenders may set a maximum number. They will also most likely examine your credit score and debt-to-income (DTI) ratio to ensure you can pay your new bill. Your DTI ratio is all monthly debt payments divided by your gross monthly income.

Lender policies vary, but here’s a closer look at the factors they may consider: 

• On-time payments: Lenders may be more willing to offer a second personal loan if you have a history of on-time payments and your DTI ratio is within their requirements.
• Total loan amount: While some lenders restrict borrowers to two concurrent personal loans, others may curb the total amount borrowed. 
• Good credit: The higher your credit score, the more likely you’ll be approved for a personal loan at favorable rates. Applying for a second personal loan could bring a higher rate than your first because your debt load will increase. Multiple applications in a short period of time could also dent your credit score.

Borrowers have many things to consider when taking out multiple personal loans: higher monthly payments, potential negative impacts on your credit score and long-term financial health.

Your creditworthiness and income, lender policies and regulations, loan types and their purposes play a role in whether you can qualify for a second personal loan.

Creditworthiness and Income

Creditworthiness is an objective measurement based on your credit history. Lenders assess your history of paying your debts, credit score and DTI ratio, among other factors specific to each lender. Your creditworthiness is more than just having a good credit score; it means establishing a history of financial responsibility. 

Part of financial stability is your income. Lenders will likely require that you provide a W-2 and pay stubs for employed work or a 1099 for contract work. They may want to look at your most recent tax return and how long you’ve been in your current position.

Maximize your approval chances by paying your debts on time, maintaining a steady job and keeping your DTI below 35%. A new personal loan could spike your DTI well above that 35% cutoff.

Lender Policies and Regulations

Every financial institution will have its own criteria for determining your loan eligibility. Some lenders will be more strict, while others may be more lenient and willing to take on more risk. 

The policies and regulations that affect you most as a borrower include the lender’s method of assessing risk, loan amount limits, interest rates and your relationship with the lender. 

You can maximize your chances of obtaining multiple personal loans with your lender of choice by ensuring you are handling credit responsibly, only pursuing the loan amount you need, shopping around for the lowest APR you can qualify for and building a strong relationship with your lender.

Loan Types and Purposes

There is a wide variety of personal loan options available to fit your financial needs. Some common types include: 

• Unsecured personal loans: Most personal loans are unsecured, meaning no collateral is required. Instead, borrowers leverage their creditworthiness to obtain approval.
• Secured personal loans: Some personal loans are secured by a savings account, vehicle or other type of collateral. They may have lower interest rates than unsecured personal loans, but your collateral is at risk if you default.

• Debt consolidation loans: Consolidating multiple high-interest debts into one new bill at a lower rate is a popular reason for taking out a personal loan. Some lenders market these as debt-consolidation loans, but they’re typically unsecured personal loans. Once you receive the lump sum, you’ll use the cash to pay off other bills.
• Personal line of credit: If you’re unsure exactly how much you might need to borrow, a personal line of credit gives you access to a certain amount of money that you can tap as needed. An advantage is that you’ll only pay interest on what you borrow, but a downside is typically variable interest rates.  

Knowing your personal loan options can help you make an informed decision that will help you accomplish your financial goals.

Instead of taking out multiple personal loans, your financial situation might benefit from other solutions. Consider the following alternatives.

Home Equity Loans or Lines of Credit

Home equity loans and home equity lines of credit (HELOCs) are solid alternatives if you own a home and have built up significant equity. Unlike a typical personal loan, they’re secured by your home but may have lower interest rates and longer repayment terms. 

A HELOC is a revolving line of credit that you can draw from and repay multiple times within the term limit — you only pay for what you use with a HELOC. A home equity loan is a single lump sum you repay over time until the entire loan plus interest is repaid. 

One big downside of both a home equity loan and a HELOC is that if you don’t repay them, you can lose your home.

0% Interest Credit Card

Instead of opening a personal loan, you may be able to take advantage of a credit card with a 0% introductory APR or 0% balance transfer. You could use the card to make purchases without interest if you pay off the balance before the 0% period ends.

This strategy may work well for you if you have good or excellent credit and can afford to pay off the balance within the allotted time period — most 0% APR deals are good for up to about 18 months, and then the card resets to its regular APR, which can be quite high. Be sure to check time periods and eligible amounts.

When deciding if a new loan is right for you, consider: 

• Repayment: Consider whether you can realistically and comfortably afford the new repayments while still covering your monthly essentials and other financial obligations. 
• Interest rates and fees: Interest rates and fees can add thousands to your overall debt. Compare costs between multiple lenders to make an informed decision. 
• Long-term financial implications: Consider the effects of increasing your liabilities with an additional personal loan and how an increased debt burden can hinder your financial flexibility and goals. The stress of carrying debt and the potential hurt to your credit score can also cause financial strain.  

Multiple personal loans are typically a good idea only when they can be used to consolidate higher-interest debt, said Christopher Johns, lead wealth adviser at Spark Wealth Advisors. For example, you may incur more credit card debt after taking out a first personal loan. In some cases, it may be wise to use a second personal loan to consolidate the new debt. 

But Johns said this can also be a sign of poor financial management.  “Personal loans can be harmful,” Johns said, “if the underlying reason for the loan is due to bad spending habitstaking on debt just to keep up with lifestyle spending can be very harmful to one’s overall financial health.”

Your credit score can be affected positively and negatively by multiple personal loans. Every time you open a new credit application, the lender will almost always perform a credit check. Typically, it’s a hard inquiry on your credit score, and your score may drop a couple of points temporarily. 

A long track record of on-time payments on your personal loans can increase your credit score over time. But missed payments can negatively affect your credit score.

Your three-digit score is based on the information inside your credit report, a record of your credit use and the status of your credit accounts. A credit report is an essential piece of information when considering another loan. Before you fill out an application, it’s wise to know your creditworthiness and whether your credit score is where lenders want it to be.

If you’ve carefully considered the effects of multiple personal loans and decided they’re right for you, it’s time to increase your chances of getting approved. 

You can strengthen your credit profile by paying your debts on time, decreasing your existing debt and avoiding opening multiple lines of credit in a short period. Responsibly managing the debt you currently have signals to lenders that you are likely able to repay a new loan. 

You’ll also need to demonstrate stable income by staying with your current employer and providing recent pay stubs, a W-2 and your most recent tax return.

Though most lenders won’t increase the size of an existing personal loan, you might be able to refinance your existing loan and add money to your borrowing.

You’ll need to consider the terms and fees of a new credit application and how it will affect your repayment schedule. For starters, you may see a larger monthly bill due to the increased balance, and if the refinanced loan has a higher interest rate, that bill could balloon even more. You will also have a higher DTI ratio, and your credit score might be affected by refinancing. In that case, you’ll likely want to look at other options.

Opening multiple personal loans may give you the necessary cash when you need it most, but before you begin your application, remember to consider the implications to your overall debt, credit score, and credit history. 

Your creditworthiness and income, lender policies and regulations and differing loan types and purposes must all be carefully assessed. Research the alternatives to multiple personal loans, including home equity loans or lines of credit.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.