Can You Have Two Payday Loans at Once?
Payday loans can be a convenient option if you’re undergoing financial difficulties and need cash before your next payday. If you already have a short-term loan and want to take out two payday loans at once, you’ll have to keep some things in mind.
Can you have two payday loans at once?
The simple answer is, “Yes, you can.” However, this depends on the lender and the state that you live in.
If it’s legal in your state, you’ll have to go through a rigorous approval process. You’ll need to meet tougher criteria than when you applied for your first loan because multiple payday loans are a substantial risk to the lender and a bigger financial burden to the borrower.
Why you shouldn’t take out more than one payday loan
Sometimes, emergencies can make you feel that there is no option besides taking out more than one payday loan. However, although it may look as though it is remedying your funding shortage and fulfilling your requirements, it isn’t a good idea.
Payday loans are not long-term solutions
Payday loans are intended to be a quick way of solving one-time emergency needs for cash. According to experts, you should consider them only when you’ve exhausted all other options, including borrowing from friends and family.
Repeatedly taking out smaller loans can be very expensive as time goes on because compounding interest will continue to sink you deeper into debt. A short-term emergency can end up becoming a long-term burden if you keep borrowing. Multiple payments can be tough to manage on top of being expensive.
It can hurt your credit score
When you request a payday loan for even a month, inquiries will be made on your credit score. This can hurt your credit rating even before your loan request has been approved. Besides, having multiple loans at once for such a short time can show that you are in a difficult financial position and may not be able to pay back your debts or handle your finances properly. This can worsen your credit score.
What do lenders look at if you request two payday loans?
All lenders want to be certain whether you are able and willing to repay the money that you seek to borrow. To do this, they will take a look at various factors such as your credit history, your current financial position, loan repayments, and details of your employment and income.
If you have any debt obligations or have become unemployed since your first payday loan, you may have trouble qualifying.
In general, there is no real guarantee that you’ll be approved, even if you are borrowing from a lender who previously provided you with a loan. However, if you want more than one payday loan, you will have to look at the eligibility criteria to see if you still qualify. Sometimes, lenders specify that you can’t be currently repaying a short-term loan, or that you can’t use a second loan to pay off the first.
You should also look at your budget to see if you can afford to make repayments on the new loan. Payday loans often have much higher annual percentage rates than conventional loans, and paying off two payday loans at once could be too much of a financial strain.
Besides, there are fees to pay for subsequent loans that could end up being much higher than the amount you borrowed.
Borrowing from different companies
Can you get a payday loan from two different companies?
Although you can, this is not recommended, even more so than getting multiple payday loans from the same lender. Many people opt for taking out additional loans to repay other loans that are due. Not only is this tactic bad for your credit score, but it can also lead to substantial financial losses. You may struggle to keep up with all of the payments.
As it is, being in debt is not an ideal situation, and you don’t want to add to it by taking multiple loans at once.
Alternatives to taking multiple payday loans
Instead of taking out multiple payday loans, you could look into other options. Borrowing from friends and family can be a better idea, and you might even be able to avoid paying interest on your loan this way.
You could also sell an unneeded item to get some extra cash and cover unexpected expenses. Valuable items will get you more money. Even an extensive collection of small items, such as DVDs, can get you a sum that is more considerable than what you might expect.
You could also try cutting expenditures on luxuries if they’re excessive. You need to avoid spending money on goods and services that are not necessary, like streaming services and take-out dinners. Making simple adjustments to your budget might help you avoid taking out a loan altogether.