Arizona Tribune - Can I take out a personal loan if I already have one?

Can you have multiple personal loans?

The short answer is yes, you can. No law prevents you from having more than one personal loan.

Some lenders do not allow you to have multiple loans, while some have a cap on the amount they can lend. For instance, if you've already borrowed $5,000 from a lender who has capped lending at $20,000, you can apply for another loan worth $15000. However, if your existing debt with that lender is already at $20,000, then they may not offer you another loan.

The lender will also consider your income and credit score at the time of your new application. Many things can change financially between when you took out the first loan and now. Lenders will also consider your payment history with them. If you've been behind on payments on your current loan, they may not be as willing to extend another loan to you.

Why do you need another loan?

The reason for your loan is more important for you than it is for the lender. Ask yourself why you believe you need to apply for another personal loan in the first place. If it is to help pay for an emergency expense that can't wait or are the funds for something like a vacation or new tech that could probably wait. Weigh the pros and cons of getting another loan to ensure you're not overborrowing for something you could most likely save for and purchase in the future.

What determines eligibility for a second personal loan?

When borrowing from a lender, they'll consider a few things, like your credit score, income, and debt-to-income ratio.

Debt-to-income ratio

A debt-to-income ratio is an important factor in personal loan approval. It's a calculation based on the amount of total monthly debt payments you have relative to your gross monthly income. Higher ratios typically mean more risk for lenders since it's more likely that you won't be able to make all your payments.

Credit history

For many lenders, your credit history is one of the most important factors in determining whether a personal loan will be approved.

If your credit is in good standing, it may indicate that you have maintained responsible repayment habits in your past financial endeavors. Lower scores may create some difficulties in qualifying for a new loan or getting favorable interest rates and terms.

The Bottom Line

If you're interested in applying for more credit, pay attention to your credit score, your lender's policies, and your debt-to-income ratio. If you have a lower debt-to-income ratio and a higher credit score, you may qualify for a second loan.

It's essential to consider your ability to repay a second loan and ensure you're borrowing to tackle an emergency and not fuel any overspending habits.

SPONSORED CONTENT

CONTACT:

Sonakshi Murze
Manager
[email protected]

SOURCE: OneMain Financial

View the original press release on ACCESS Newswire

T.Perez--AT