Can You Have Two Payday Loans at Once?

Payday loans are a common solution when it comes to unexpected expenses. These bad credit loans are an excellent option for people with unfair credit because they require no credit check. However, many borrowers realize they can’t repay the money by their next payday after receiving it. 

So, what should you do in such a situation, and can you have two payday loans at once?

What Is a Payday Loan? 

A payday loan is a loan that borrowers get by their next salary to pay for medical bills, car or home repairs, utilities, rent, and other expenses. Payday loan lenders don’t perform hard credit inquiries, allowing even people with poor credit histories to get approved. However, in this type of loan, borrowers pay a significant APR of 400%. 

This short-term loan is an excellent option in emergencies because payday lenders provide cash within 24 hours, so you can receive the loan amount in your bank account the next business day. 

How Many Payday Loans Can I Get at Once?

All states have various payday loan regulations, and the number of loans you can get at once differs depending on the region. Thus, in Washington, borrowers can have eight payday loans at the same time. On the other hand, California and Virginia have stricter loan limits, prohibiting having more than a single payday loan. 

Even if your state allows getting multiple loans, don’t consider them as your primary option. A payday loan is one of the most expensive ways to borrow money. While the interest rate for personal loans is around 2,49%, payday options have 400% APR (annual percentage rate). Therefore, obtaining several small loans may trap you in a debt cycle. 

Can I Get Another Loan if I Already Have One?

If the amount you received from your previous loan is not enough, in several states, you can get a second payday loan. However, this amount cannot be from the same lender, so it is crucial to find a financial institution that will approve your request despite having another outstanding debt.

While people can easily apply for multiple payday loans at once in specific states (such as Washington), they are forbidden in others. Before applying for additional payday loans, pay attention to your state law to discover how many loans you can have in your region.

Although many payday lenders allow borrowers to get multiple loans, it is still not recommended. Remember that you need to repay them by your next paycheck.

Having a second loan often leads to accumulating more debt than finding solutions. You have a significant chance of falling into the payday loan trap, where you regularly take more loans to repay the previous ones. Unfortunately, getting out of such a trap can be a challenging task. 

Can You Get 2 Payday Loans From Different Places?

You can obtain two loans from different financial institutions. However, not every payday lender will approve your loan application. The loan provider will see your previous payday debt when conducting a soft credit check. As a result, many lenders will consider you a high-risk borrower and may refuse your application.

Where Can I Get a Payday Loan if I Already Have One?

Multiple lenders offer short-term loans, but not all lenders will approve your application for a second payday loan. Before making a request, compare different loan providers’ terms and conditions and ensure their legal status. 

If you need a no fax payday loan, consider applying through 15M Finance. The company cooperates with multiple lenders, increasing your chance of getting approved for a second loan, if it is legal in your state. 

It helps you to receive cash advance with no phone calls, paperwork, or faxing requirements. Once approved, the lender will contact you, and the funds will be in your bank account on the next business day. 

Will a Payday Lender See My Current Loans?

As a rule, yes. Most payday lenders review your bank statements to ensure you can repay the loan, so they will see your outstanding payday loans and other debts. 

Having multiple loans lowers your chance of getting approved, but it is still possible. Several financial institutions can approve your application for a second payday loan. However, be prepared to pay high-interest rates and fees. 

Do Payday Loans Affect Your Credit Report? 

Payday loans should not be considered a way to build a good credit score since they don’t appear on borrowers’ credit reports. The main advantage of these types of loans is that they don’t require a hard credit check. Payday lenders don’t report your on-time payments to three main credit bureaus (Equifax, Experian, and TransUnion) to make a loan decision. 

If your goal is to improve your credit history, it would be better to consider a payday alternative loan or a bad credit personal loan. For all the options, you will need to pay high-interest rates and fees in addition to the initial loan amount. However, the last two can help you improve your credit scores. 

Stay on One Payday Loan 

Consider taking a second loan as a last resort, as it involves high risk. You will likely face significant interest rates you can’t cover by your next paycheck. Many lenders try to get as much as possible from vulnerable parts of society, offering them loans that are difficult to repay. This can significantly damage your credit and increase overdraft fees on your checking account. 

What Are Alternatives to Payday Loans?

Obtaining multiple short-term loans is generally too risky, so if payday lending is too expensive for you, consider exploring other options for borrowing money. 

Help from Family or Friends

The safest way to borrow money is by borrowing from your friends or family members. You don’t need to pay any additional costs, so you can save money and protect yourself from high interest and extra fees.

Installment Loan

Applying for installment personal loans is often a better option than taking out more payday loans. This type of loan is much more affordable, offers a more convenient loan term, and allows for a larger maximum loan amount. While in the case of a payday loan, you can borrow up to $1,000, in an installment loan, this sum reaches $5,000.

Even if you have a less-than-perfect credit history, you can find installment loans for bad credit. Furthermore, lenders report your on-time payments to the major credit bureaus, which can help you build your credit. 

Emergency Fund

If you have an emergency fund, repaying your payday loan is an opportune moment to utilize it. This option will help you cover your outstanding debt without applying for a second payday loan and risking getting caught in a cycle of debt. 

Credit Counseling Agencies

Nonprofit credit counseling agencies can assist you in repaying your debt by creating a repayment plan or even negotiating with your lender. With their help, you may obtain better repayment terms and learn effective budgeting techniques. 

Credit Cards

Getting a credit card is generally more cost-effective than applying for multiple payday loans. Depending on your credit, you can find credit cards available for individuals with bad credit scores and 0% APR cards for those with excellent credit. 

Home Equity Loan

Due to their lower interest rates compared to other loan options, home equity loans are a more affordable choice. If you possess a significant amount of equity in your home, this option may be suitable for you!

Negotiating with the Lender

Instead of taking multiple payday loans, you can negotiate with your lender for more affordable repayment terms. It will be cheaper for you than applying for another cash advance and will be a sign to the lender that you are interested in repaying a loan. 

Bank or Credit Union

In banks and credit unions, you can apply for various types of loans, including installment, personal, small loans, and many others. Different from other options for borrowing money, getting approval with poor credit is more complicated.

Extra Work 

In general, borrowers end up paying excessive amounts for their loans, making it infeasible for everyone to rely on online lenders or banks for funds. Therefore, seeking additional employment is an excellent option to generate extra income for debt consolidation. 

You can find remote work or initiate your own small business venture. These alternatives will not only aid in debt repayment but also greatly enhance your financial circumstances.

FAQ

How Do Cash Advance Apps Work?

A cash advance app is a mobile application that allows you to borrow money without interest rates. They may be free or may charge a small monthly fee. Furthermore, cash advance apps are considered safer and more convenient than payday loans.

How Do Title Loans Differ from Payday Loans? 

Unlike a payday option, a title loan is a secured loan where your auto is collateral. Getting both loans does not require a good credit score, but in a title loan, if a borrower fails to repay the debt, they will lose the vehicle. 

How Many Payday Loans Can I Get at Once?

You can get one loan from the same lender. Several states, such as Washington, allow borrowing multiple payday loans from different lenders. In other states, for example, California, you can’t apply for more than one payday loan.  

Final Thought

Obtaining multiple payday loans carries substantial risks and should be considered a last resort for acquiring additional funds. If getting a second loan is necessary for your situation, explore alternatives like installment loans or personal loans. 

Payday loan borrowers should carefully consider the high-interest rates, short repayment terms, and other challenges they may encounter. Incorporate healthy financial habits into your life to avoid pitfalls associated with payday loans.