Apply to Borrow £1000 to £25,000*
Apply for fast and secure online loans today
- Apply For £ 50 – £ 1,000
- Fast Payout
- No Fees
- Secure Appilcation
- Available 24/7
- Bad Credit
REPRESENTATIVE 481.6% APR
You might have recently taken out a personal loan. However, you’ve realised that you actually need more funds to cover another expense. You are, of course, wondering if there is a way for you to get financing for the second time. The second loan can be a huge help especially since you have grossly underestimated the financial needs. But can you?
Can You Acquire Multiple Personal Loans at Once?
Most lenders will allow you to apply for a second loan as long as you have already paid off part of the balance of your initial loan with them. If you have established a good history concerning your repayments, then they will likely approve the application too.
However, this might not be a good thing. For the second loan, you cannot expect to get the same terms extended to you for your first loan. Loan terms and interest rates will depend on your credit score as well as the ration between your income and your credit. Since you have just recently took out a loan, expect that your debt to income ratio is going to be high and the lender will view that as a risk. Borrowers with high existing debts are generally considered high risk by lenders as this reduces their ability to get their repayments done on time.
Problems Caused By Taking More Than One Personal Loans at a Time
Aside from causing your credit rating to dip, applying for another loan when you are still paying off an initial one may make you look as if you’re in a hurry to borrow money which you obviously do not have. The lender will probably think that they might not be able to get the money back from you. If they do decide to lend you more, expect that the terms are nowhere as good as the initial loan you got. Naturally, the lenders will want to find ways on how to mitigate the risks involved.
Things to consider before getting a new loan
If you do decide to get another loan while you’re still paying for an existing one, expect that you will likely have problems getting credit in the future. When done in moderation, taking a credit can be good for your credit. But if you are getting too many inquiries on your credit report due to too many loan applications, lenders will not look at you too kindly. The new loan is going to cost you a lot more, so expect that the interest rates will be more expensive.
You’ll owe more every month as well. Multiple loans would mean more repayments to do every month. Keeping track of your due dates would be harder. Besides, it might not even be the kind of financial help you need. Always relying on loans every time you are in a financial bind will only cause you to get stuck in a debt cycle.
Is it Okay to Have More Than One Personal Loan?
If you have an existing personal loan and you have the need to take out another one, you may be thinking, “is it okay to have more than one personal loan?”
In general, there’s nothing wrong with having more than one personal loan provided that you can keep up with the repayments. A personal loan is one of the most common types of borrowing. Keep in mind, though, that there are also disadvantages in having multiple personal loans.
As mentioned earlier, you should be fine with having more than one personal loan as long as you can pay what’s due on time. The problem that arises with having more than one is when you are having trouble with the loan repayments that you end up missing payments or defaulting on the debt.
Every time you get a loan, your credit score decreases. This is especially true if the loan providers run hard inquiries for each loan application. By having more than one loan at a time, your credit score suffers which will make it more difficult for you to borrow again if an urgent need comes up.
It is okay to avail of multiple loans if you are able to maintain your credit rating and keep up with your monthly repayments. Avoid taking out a personal loan if you don’t really need it. If you are having trouble managing repayments, you can seek a lender that can provide a debt consolidation loan so that you only have one personal loan to keep track of.