What you need to know about applying for a second, or even third, short term loan
Short term loans, commonly referred to as payday loans, can be a convenient option when you’re strapped for cash before your next payday. If you already have a short term loan and you need another one, there are a few things you need to know before you apply.
Is it possible to take out multiple short term loans?
It depends on the lender and your state of residence.
If it’s legal in your state, you’ll need to meet more stringent criteria than when you applied for your first loan because a second short term loan is more of a risk and a greater financial burden.
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What will lenders look at when I apply for a second short term loan?
Lenders will want to ensure you will be able to repay the loan.
To do this, they will review your current financial situation and look at multiple factors, which can include your credit history, what payments you make on your current loan, your current employment and your income.
How can I make sure I’m approved for a second short term loan?
There’s no way to guarantee if you’ll be approved. If you’re looking to take out a second loan keep the following in mind:
- Reexamine the eligibility criteria. You may or may not be eligible for loans you were once eligible for. Some lenders may specify that you can’t currently be repaying a short term loan and that you can’t use a second loan to pay for the first.
- Check your budget. Can you afford the repayments of the loan you are applying for? If you think you will struggle to make multiple loan payments, then you should consider alternative financing options, such as financial assistance programs.
- Be aware of rollover fees. If you choose to refinance your first short term loan into a second loan with the same lender, you’ll still owe the original amount you borrowed and the fixed fee, plus the fees for the subsequent loan.
The bottom line
Compare your options before applying and always examine the eligibility criteria carefully. There’s a range of payday loans available, so you have a better chance than ever before of finding the right loan for you.