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Can I take out two personal loans at once?

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Risks and tips for taking out a second loan when you’re still paying for a previous one.

It’s not hard to imagine: You’ve already taken out a personal loan for your wedding — but that was before you found your dream dress. You got financing to redo your home — but that was before you found the perfect bathroom tiles.

A second loan can help when you’ve underestimated costs for an event, big purchase or other expense. But beware: It can be more expensive and riskier than that first loan.

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    Can I take out two personal loans at the same time?

    Yes, many lenders allow you to take out a second loan once you’ve paid off part of your initial balance and established a history of on-time repayments. But it’s not always a good idea.

    For one, you might not get the best deal. Lenders decide how much you can borrow, your APR and loan term based on factors like your credit score and debt-to-income ratio (DTI). If you’ve recently taken out a loan, your credit score will have taken a hit after getting a hard credit check, which can make you appear like more of a risk.

    The fact that you’ve recently taken on debt also increases your DTI, which lenders look at to determine your ability to repay a loan. Like low credit scores, borrowers with higher DTIs are considered risky and may have trouble being approved for a loan with a competitive interetest rate.

    Beware of overborrowing

    You might want to rethink that loan for another reason: Overborrowing. Borrowing more than you need will increase your monthly payments and the overall cost of your loan, making it more difficult for you to pay off your debts. It can also spark a cycle of debt if you become dependent on loans as a source of capital.

    Avoid overborrowing by calculating exactly how much you need before applying for a personal loan and only applying for that amount.

    What are lenders’ rules for taking out multiple loans?

    Each lender has its own requirements for taking out a second loan before you’ve paid off the first. Here are the second loan policies of six top online lenders:

    LenderCan you take out more than one loan?Criteria
    ProsperYes. You’ll have to wait at least six months before applying for another loan. Any outstanding loan is included in Prosper’s $40,000 total loan limit. Payments can’t be combined.
    • Active loan must be current and in good standing
    • Credit must still be 640 or higher
    • No late payments within the last 60 days
    • No payments over 15 days late on an active loan in the last year
    • No more than two returned loan payments on record in the last three years
    LendingClubYes. You can have up to two active personal loans at the same time. If your loan has been partially funded and you reapply during a 30-day period, LendingClub will considered a single loan.
    • LendingClub will send you an invitation when you’re eligible for a second loan or you can complete a new application to check eligibility
    • Approval depends on a variety of factors
    Laurel RoadYes. The total loan limit has a maximum of $45,000. There is no waiting period and payments can’t be combined.
    • Active loan must be current and in good standing
    • Underwriting will review the application to determine eligibility
    LendingPointNo. It’s only possible to take out one loan at a time.
    • Not allowed by this lender
    Marcus by Goldman SachsNo. It’s only possible to take out one loan at a time.
    • Not allowed by this lender
    UpstartYes. At time of application, you may have only one outstanding loan with Upstart.
    • On-time payments for six consecutive months
    • No more than $50,000 of outstanding principal on first loan
    • 60-day cooling off period before applying for second loan if any of the six most recent monthly payments were not on time or you paid off the loan before reaching six monthly payments

    3 cautions to consider before getting another loan

    1. You might have trouble borrowing in the future. Taking on debt can be good for your credit if done in moderation. But it doesn’t look good when you apply for a loan and have too many inquiries on your credit report or are on the hook for a lot of debt.
    2. It might not be the financial help you need. Regularly taking out personal loans to cover everyday expenses could be an indicator that you’re stuck in a debt cycle. In this situation, you might benefit from other financial services like debt relief.
    3. How much you owe each month will increase. Multiple loans means multiple monthly repayments. While lenders generally won’t approve you for a loan that you can’t afford, if your financial situation changes, it could be more difficult to make these repayments than if you took out a larger loan with a longer term.

    What about applying for multiple loans at the same time?

    Applying for multiple loans at the same time could hurt your credit score. But the damage it does depends on how far you get in the application process, your loan type and how much time you let pass between applications.

    If you’re just interested in comparing rates, many lenders allow you to fill out a prequalification or preapproval application to get an idea of what kind of loan you might get if you continue. These typically use a soft credit pull, which has no impact on your credit. Taking further steps often involves a hard credit check, which can temporarily damage your credit.

    The exception is rate shopping — or applying for multiple loans over a short period of time — especially with auto loans, student loans or mortgages. If you’re applying for roughly the same amount of money with similar lenders, credit bureaus often recognize that you’re trying to find the best rate, not actually attempting to take out multiple loans.

    In this case, credit reporting agencies count all hard inquiries from lenders within a certain period — usually between 14 and 45 days — as one. The inquiry also won’t appear on your credit report immediately, allowing you to look for multiple loans with your original credit profile.

    Compare top online personal loan providers

    Rates last updated December 9th, 2018

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    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR
    Even Financial Personal Loans
    Get connected to competitive loan offers instantly from top online consumer lenders.
    550
    $100,000
    3.84% to 35.99% (fixed)
    Credible Personal Loans
    Get personalized rates in minutes and then choose a loan offer from several top online lenders.
    Good to excellent credit
    $100,000
    4.99% to 36% (fixed)
    NetCredit Personal Loan
    Check eligibility in minutes and get a personalized quote without affecting your credit score.
    550
    $10,000
    34% to 155% (Varies by state) (fixed)
    Monevo Personal Loans
    Quickly compare multiple online lenders with competitive rates depending on your credit score.
    550
    $100,000
    3.34% to 35.99% (fixed)
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    660
    $40,000
    6.95% to 35.89% (fixed)
    SoFi Personal Loan Fixed Rate (with Autopay)
    No fees. Multiple member perks such as community events and career coaching.
    680
    $100,000
    7.24% to 15.24% (fixed)
    Marcus by Goldman Sachs Personal Loans
    Consolidate your debt or pay off large expenses with competitive rates and no fees.
    Good to excellent credit
    $40,000
    6.99% to 24.99% (fixed)
    Avant
    Conveniently check your loan options without affecting your credit score.
    580
    $35,000
    9.95% to 35.99% (fixed)
    OneMain Financial Personal and Auto Loans
    An established online and in-store lender with quick turnaround times. Poor credit is OK.
    Varies
    $30,000
    16.05%–35.99%* (fixed)

    Compare up to 4 providers

    4 tips to get a personal loan application approved

    You’ve decided it makes financial sense to get a second loan. Here are a four things you can do to increase your chances of approval:

    1. Check your credit report first. There’s a chance that your credit report contains mistakes that could hurt your credit score. If you notice anything off, contact the financial institution involved and the credit bureau to have it fixed before you apply for a personal loan.
    2. Make your repayments on time. Your payment history accounts for 35% of your credit score. Making all of your payments can increase your credit rating while missing some payments can cause it to dive.
    3. Pay off as much debt as you can. The less debt you have, the more attractive you are to lenders. Try waiting as long as you can before taking out a second loan to lower your DTI and up your chances of approval and competitive rates.
    4. Know how much you can afford. You aren’t likely to be approved for a loan with monthly repayments that you might not be able to afford. Having an idea of how much you can pay and how much your loan will cost can help you find the right loan for your personal financial situation.

    Got an ongoing project? Consider a line of credit

    When you’re not sure how much you’re going to end up needing to borrow, a line of credit might make more sense than applying for a personal loan. Lines of credit have the flexibility of a credit card — you can withdraw however much you need — but they typically come with higher credit limits and lower rates, similar to a personal loan.

    Some are revolving and come with minimum monthly payments like you’d get with a credit card. Others come with fixed terms, typically one to five years.

    Is a personal line of credit right for you?

    Bottom line

    It’s possible to take out more than one loan at once, but it could damage your credit and increase your debt-to-income ratio, making it more difficult for you to qualify for competitive rates in the future. Overborrowing can also lead to unaffordable monthly payments and a cycle of debt.

    This doesn’t mean a second loan is always a terrible idea. If you find yourself needing more funds than you originally anticipated, you can afford to take on more debt and you’ve paid off some of your original loan already, a second loan could help. Use our personal loans guide as a starting point to find and compare lenders.

    Frequently asked questions

    Anna Serio

    Anna Serio is a staff writer untangling everything you need to know about personal loans, including student, car and business loans. She spent five years living in Beirut, where she was a news editor for The Daily Star and hung out with a lot of cats. She loves to eat, travel and save money.

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    LendingClub Personal Loan

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    SoFi Personal Loan Fixed Rate (with Autopay)

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    US Personal Loans Offers

    Important Information*
    Credible Personal Loans

    Get personalized rates in minutes and then choose a loan offer from several top online lenders.

    Monevo Personal Loans

    Quickly compare multiple online lenders with competitive rates depending on your credit score.

    LendingClub Personal Loan

    A peer-to-peer lender offering fair rates based on your credit score.

    SoFi Personal Loan Fixed Rate (with Autopay)

    No fees. Multiple member perks such as community events and career coaching.

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