Is it possible to get more than one loan at a time?
Depending on what you need the money for, it could make sense to apply for several loans at the same time. But is it possible to get more than one loan or form of credit at any given time? In this article, we explain whether you can apply for more than one loan at a time and tell you what you need to know about doing so.
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So, can you have more than one loan?
It’s absolutely possible to apply for more than one loan at the same time. You might even be able to apply for several loans with the same lender, but this will depend on the eligibility requirements. You need to remember that every loan application is considered individually, so you need to factor in your credit utilisation ratio, as this is likely to affect the lender’s decision about whether to issue you with more credit.
Lenders look at your credit utilisation ratio because it tells them how much money you’re currently borrowing. Most of the time, it makes sense to keep your ratio below 30%, and if it’s higher than 50%, you will probably struggle to access multiple forms of credit simultaneously. That being said, if you apply for two relatively small loans, you shouldn’t have a problem if you keep your credit utilisation ratio low.
Is applying for several loans at the same time a good idea?
This really depends on what you need the money for. For example, if you’ve recently taken out a personal loan to buy a car, you could theoretically apply for another personal loan to pay for a home improvement project. As long as your credit utilisation ratio is low enough and you have a good credit score, the fact that you’re applying for two loans at once shouldn’t influence a lender’s decision. You just need to make sure you can afford both loans, as defaulting on your payments is bad for your general financial health.
What about other forms of credit?
It’s common for people to have several forms of credit at the same time. For example, there’s no reason why you can’t have a personal loan, credit card, and mortgage running alongside one another. But the key thing to remember is that you need to be able to meet the repayments on each of these forms of credit, as missing or making late payments will have a significantly negative impact on your personal finances going forward. This is because a lender will look at your track record of paying money back before issuing credit in the future.
The bottom line
So, the answer is yes; you absolutely can apply for more than one loan at any given time. You can also have several forms of credit running simultaneously. But it’s so important to consider affordability before applying for any type of credit. If you can’t afford to pay the money back that you apply for, you shouldn’t borrow it in the first place.
It also makes sense to consider what you need the money for and whether or not you can save some cash to pay for a purchase, as it saves you from paying back interest. But if you’ve done your sums and are confident that you can pay the money back, there’s no reason why you can’t apply for two loans at once.