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    How Many Loans Can I Have Running At The Same Time?

    Nathan J. Lee - 2019-01-20 14:16:13

    When it comes to personal loans, there is no limit on the number of loans you can obtain at a given point in time. However, lenders have the authority to limit the amount you can borrow.

    If you have a high debt-to-income ratio (DTI), your application might be rejected. Still, it does not necessarily depend on the number of existing personal loans you have.

    Whenever you take a loan, your DTI ratio increases as you accumulate debt. If the DTI ratio is around 40%, it means 40% of gross monthly income is going towards repaying debt. Generally, mortgage lenders are unlikely to approve borrowers with a ratio above 43%.

    If you have an existing personal loan and are seeking another one, consider realistically whether you can manage this level of debt. Remember that it will directly impact your credit score.

    Qualifying For Another Loan

    Federal regulations do not prohibit anyone from having multiple loans. Still, some states regulate the number of payday loans a person can have at once. Qualifying for additional loans, however, can be problematic.

    Your DTI ratio, which is an overview of your debts and income, is one of the most important factors considered to approve a loan. In some cases, lenders might approve your loan, but with a high annual percentage rate (APR). 

    A credit score is another important factor that is taken into account when you apply for a loan. Hard credit pulls, which happen during the application review stage, can lead to a temporary drop in your score.

    Your overall score could be affected if you apply for multiple loans within a short period. Irrespective of your application getting approved or not, hard inquiries do occur.

    What About Multiple Loans From The Same Lender?

    When considering the same lender, there could be a cap on a number of loans approved at the same time or a maximum amount that can be borrowed. 

    When you opt for another lender, it does not mean you will automatically be disqualified from having other outstanding loans. Yet, if you repay the other loan and have a lower DTI, you are more likely to get approved for a new loan.

    Here are some of the popular lenders you can consider borrowing from.

    SoFi

    Social Finance (SoFi) is an online personal finance lender that offers personal loans, mortgages, student loan refinancing, and more.

    Maximum Number Of Loans

    • They allow one in Michigan and two in every other state. 
    • You must make three successive payments towards the current loan to qualify for an additional loan.

    Maximum Loan Amounts

    • You can only borrow up to $100,000 irrespective of the number of loans you have outstanding.
    • They offer the option to change your payment dates.

    LendingClub 

    LendingClub is a peer-to-peer lending company that offers personal loans, auto refinancing loans, and other financing types.

    Maximum Number Of Loans

    • They offer a maximum of two loans in every state.
    • As a borrower, you must repay for 3-12 months before being considered for an additional loan.

    Maximum Loan Amounts

    • You can borrow $40,000 for the first loan. 
    • For the second loan, you can receive up to a maximum amount of $50,000.

    Rocket Loans 

    Rocket Loans is an online financial services company that offers personal loans at low rates.

    Maximum Number Of Loans

    • You can have a maximum of one loan at a time.
    • They offer a soft credit check with pre-qualification

    Maximum Loan Amounts

    • You can borrow a maximum of $45,000. 
    • There is an option of a potential rate discount for autopay.

    How Do I Know I Should Go For Another Loan? 

    When you decide to apply for an additional loan, there are several questions you must consider to weigh your options. Some of the points you must consider include:

    A Healthy DTI Ratio

    •  When you have existing debts, your debt-to-income ratio will be on the high side. This means that your repayment capabilities are lower, which might force lenders to reconsider approving your loan.

    No Major Stress 

    • The money you owe to lenders can be a direct source of stress.
    • If your financial situation is not healthy, consider other sources to generate income rather than opting for lenders.

    You Can Manage Minimum Monthly Payments

    • Your additional loan will directly affect your expenses and savings.
    • It is best to avoid any additional loans if you feel that your minimum monthly payments will become unmanageable.

    Conclusion

    Installment loans require a long-term commitment and work best if your expenses are planned. If you have short-term financial requirements, you can consider other options like applying for a 0% interest credit card, dipping into savings, or payment plans for medical expenses.

    When you decide to borrow money in any form for your next major expense, always consider calculating your monthly outgoings first to gain a clear idea of what will fit your budget best.