It is legal to have multiple payday loans open at once, it will depend on your state how many.
Doing so is not recommended because it might lead to a heavier debt load.
As a general rule, no payday lender should ever grant you more than one loan at a time. This would not serve the borrower’s interests industry’s ethos.
Can you have more than one payday loan open at once?
You could theoretically have many loans open with the same lender, though this is not often permitted. Depending on the lender, the total number of loans that one person may have active at any given moment may be limited.
As an alternative, some lenders have no restrictions and will let borrowers keep taking out loans from them regardless of how long it has been since the last loan was taken out and the number of payments has been made.
In order to ensure that borrowers can make repayments within the predetermined timeframes, some lending businesses also allow applicants to take out an additional loan from them after they’ve repaid a specific amount on their first loan.
What are the state restrictions on the number of payday loans?
There are various loan regulations in different states. The number of loans you can have at once is restricted by law in several states. This protects your money and keeps you from getting into debt or having other problems.
Only one or two loans may be taken out simultaneously if you reside in Ohio, Florida, Illinois, or California.
The rules are the same whether the payday loan is obtained in person or online. If you have an existing payday loan in Texas and wish to take out more loans there, you might be able to do so, and the law may even permit it.
But because different US states have different rules about payday loans and other types of loans, this might not always be possible.
Whether you can have multiple payday loans open at the same time will depend on your state legislation. Your lender may or may not have rules in place to issue you another loan while the other one is still not cleared.
Can you get payday loans at two different places?
Payday loan regulations are determined by state legislation, so they differ from place to place. Payday loans from another state are typically not permissible for borrowers. But there are some exceptions.
For instance, if you are a citizen of one US state but a permanent resident of another, you can still apply for a payday loan in the state that allows them even though they are banned in the other state.
Although you may be qualified, it is essential to keep in mind that if you already have a payday loan and the first one is still outstanding, it is doubtful that you will be approved for a second loan. Most lenders have this as a standard practice.
Should you get another payday loan if you already have one?
Ideally, no. Because payday loans have such high-interest rates, things can quickly turn ugly if you don’t pay them back. You could wind up with a pile of debt. There is a reason why it is known as the payday loan trap.
Debt collectors will call every number you’ve ever had before you realize it. Your checking account will be charged overdraft fees. Debt collection agencies may pursue you. All because you expected to borrow some cash and repay it on your upcoming payday.
Lenders are already aware of unpaid debts since they can access your credit report. They understand the many types of loans, loan conditions, and other details of the loan deal.
Additionally, they are aware of your credit history and score. They consider you riskier and more desperate if they discover you have outstanding loans. This implies they’ll charge you higher interest rates than they did on your first loan.
The interest rates and costs may worsen if you take out additional loans. You may expect your second payday loan to have a higher annual percentage rate than your first one.
Whether it’s your first payday loan or second, it’s not a decision to make lightly. Read our article about things to consider before applying for a payday loan to help you make an informed decision.
If you are struggling with paying back your payday loan, it’s always best to speak to your lender to come up with an alternative arrangement.
What do I need to do if I can’t repay my payday loan?
Taking out a new payday loan is not a good idea if you cannot pay off your first loan. All this accomplishes is to let borrowers fall into a risky debt cycle made worse by rising interest rates. Speak with your lender first before considering obtaining a second payday loan.
If you are unable to pay back your payday debts by the deadline, lenders could be able to offer advice or assistance in developing a new repayment strategy.
Is it bad for your credit score to have multiple payday loans?
Your credit score may suffer if you misuse payday loans. If the lenders who apply perform hard credit checks rather than soft searches, each time you apply for a payday loan, it may appear on your credit report and affect your credit score.
It is possible that applying for a number of loans would lower your credit score by several points because it suggests to lenders that you may be in a precarious financial position and have an unstable borrowing history. All of this will make it less likely for you to get credit or loans in the future.