Can I Get Another Loan If I Already Have One?

Young woman reading financial documents.

As of the fourth quarter of 2023, consumers held personal loans with an average balance of $11,925. Personal loans can be helpful when used wisely, but they can become a debt trap if not appropriately handled.

There may be unforeseen circumstances where you find yourself in a situation where you need more money than your loan can provide. You may start wondering if you can take out another loan. This article explores whether you can obtain multiple loans and what factors to consider before taking on additional debt.

Can you take out multiple personal loans?

The dollar amount or number of personal loans you can have with one lender varies from company to company. There is no rule that says you can’t take out more than one personal loan from a lender. Some banks allow borrowers to have multiple loans based on their credit score, employment history and income. You may also be able to get several loans from the same lender or from a few different lenders.  Regardless of whether you stay with the same lender, or try a few different ones, there are qualifying requirements in getting approved for a loan that must be met. The lender will consider all aspects of your financial life when determining if you qualify for a loan and what the terms of that loan should be.

Factors to consider when applying for multiple loans

Before applying for a second personal loan to solve your financial problems, consider these factors to prevent future financial distress:

Credit score

Your credit score affects the amount you qualify to borrow.  Credit scores range from 300-850 and they are a financial tool used by financial entities to determine your “creditworthiness” and how much risk there would be giving you a line of credit. A credit score is based on several factors.

  • Payment history: 35%
  • Amounts owed: 30%
  • Types of credit: 10%
  • Length of credit history: 15%
  • New credit: 10%

The higher your credit score, the more favorable terms you will receive since you present a lower risk to the lender. If you are concerned about your credit score, a nonprofit credit counseling agency like MMI can help.  A counselor will review your credit report and score then build you an action plan to improve your “creditworthiness”. 


Before taking out another loan, carefully assess the impact of monthly payments on your budget. Although lenders or banks will determine your loan limit by looking at how much you make each month, it is important to consider the following questions:

  • What is the total cost, and what will be the monthly payments?
  • Can you make all your loan payments on time?
  • After deducting the monthly loan, will there be enough money left to pay for your living and emergency expenses?

Before applying for additional personal loans, it is essential to check your spending habits and overall financial status. The best way to do this is to build yourself a budget. If you need help with budgeting, a credit counselor can get you started.  They can also walk you through the key questions above and make sure you have thought through the various scenarios that might impact your ability to make timely payments, ultimately impacting your credit score.

Employment history

A person’s employment history is often a good indicator of how much they have earned. A lender will consider your employment history as an indicator of stability and reliability.

The range of employment history typically assessed can be from two to three years. A borrower who has held a job for a long time will seem less risky than someone who is just starting or moving from one job to another.

Debt-to-income ratio

The more loans you take out, the higher your monthly payments and your overall debt total will be. You will have to pay more each month, and your debt-to-income ratio will increase.

A low debt-to-income ratio shows that you have a good handle on your finances. Lenders may consider that you have too much debt for your income if your debt-to-income ratio increases.

It is very important to remember that even if lenders allow you to take out multiple personal loans at the same time, this doesn’t always mean it’s a good idea.  The more loans you have, the more monthly payments you are responsible for making.  Making timely payments is the most important factor in calculating your credit score.  Additionally, each loan payment you have is subtracted from your income and could possibly make it harder to meet your other monthly financial obligations. 

If you are already struggling to meet your monthly debt payments, consider using a repayment tool like a debt management plan.

Guest Blogger: Joe Moore

Tagged in Cars and car loans

On October 31, 2023, CCCSMD merged with Money Management International (MMI).
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