Can I Have 2 Payday Loans at Once?
When having an emergency and can’t get a payday loan because you already have one, you wonder, “How many payday loans can I have at a time?” The answer to this question depends on the state you live in. The lending laws of most states (Alabama, California, Colorado, Hawaii, etc.) say payday lenders shouldn’t provide more than one payday loan. However, some loan providers may offer loans to borrowers who already have payday loans with other lending companies.
If you think about borrowing two payday loans simultaneously, learn that lenders will verify your current loans to check your debt-to-income ratio. The higher the ratio, the more likely you could receive a denial for the second loan.
Table of Contents
- Can I Get Another Payday Loan If I Already Have One?
- Do Payday Loans Appear on a Credit Report?
- Will Lenders Know Whether I Request a Second Payday Loan?
- How to Avoid Multiple Payday Loans?
- What Alternatives Can I Use Instead of Getting Payday Loans?
- Why We Don’t Recommend a Second Payday Loan?
- FAQ
Can I Get Another Payday Loan If I Already Have One?
Yes, you may get another payday loan, but it’s possible only if you already have one and live in the states where it is allowed (for example, Washington). It is also possible if you stay in a different state. We suggest you borrow responsibly because both loans will be due on your next payday, according to your loan agreement. You must repay them on time to avoid late payments. Remember, there are only a few payday loan lenders that allow this practice.
Do Payday Loans Appear on a Credit Report?
Payday loans are just the thing to help you get through a rough patch. But multiple payday loans can also be a source of stress. Most traditional lenders report your loan information to one or more credit reporting agencies (Experian, Equifax, and TransUnion) if they perform a hard credit check. If there is a soft credit check, it won’t affect your credit score. That’s why you should ask your lender whether it reports to the credit bureaus. If not, the loan won’t appear in your credit report if you repay it on time.
Will Lenders Know Whether I Request a Second Payday Loan?
The short answer is: yes; they will know you have multiple payday loans. There are two ways that lenders can find out about your request for a second payday loan. First, they may ask you directly. Second, lenders may be able to see that you have asked for more than one existing payday loan in their system.
If an individual payday lender asks you directly how many payday loans you got in the past, it is essential to tell them the truth during the loan application. They need to know to help protect themselves from illegal practices.
How to Avoid Multiple Payday Loans?
When thinking about multiple payday loans and want to know the risks, consider some ways to avoid them:
- Ask yourself what is the reason you need the money from lenders. Maybe a loan isn’t worth getting into debt.
- Review your spending habits and cut off unnecessary expenses.
- Save money for emergencies.
- Consider other options like borrowing from family or friends.
What Alternatives Can I Use Instead of Getting Payday Loans?
A short-term loan from a payday loan lender can help cover your expenses, but you’ll have to deal with high-interest rates. If you don’t want to pay them, payday loans may not be the right option. Instead, consider these payday loan alternatives:
Second Job (Part-Time)
The easiest way to avoid borrowing money from lenders is to make money yourself. Try a part-time job that will help you earn extra dollars daily or weekly, depending on the payment method. You can try network marketing, babysitting, or a handmade hobby that helps you earn cash.
Pawn Shop Loans
Pawn shop loans are short-term secured loans at a pawn shop or jewelry store. They’re typically cheaper than traditional payday loans. The pawn shop loan amount depends on the object’s value you brought. Such loans don’t require a credit check or checking account because you’ll receive your money immediately.
Unlike payday loans, which are due in full after only two or four weeks, pawn shop loans have up to six months of repayment. Simply put, you have more time to cover the debt and lower your interest rate. You’ll avoid late fees or other penalties that come with missing payments on payday loans.
Installment Loans
An installment loan is a financial product you borrow to cover more significant expenses like home improvements, family events, or short vacation trips. These loans require you to repay them within fixed monthly installments, not in a lump sum like payday loans. The maximum amount you can get is $5,000, and the average term is 24 months. Also, you should know that installment loans are cheaper than payday loans; their APR reaches 35,99%.
Title Loans
A title loan is a short-term secured loan that requires the borrower to put up their car title as collateral. You receive the money you need immediately and then pay back the loan proceeds with interest in equal installments over time. The average repayment term ranges usually from three to six months.
0% APR Introductory Credit Cards
The main advantage of these cards is the introductory period that allows you to borrow money without interest. Payday loans don’t offer such an opportunity. However, after the initial period expires, lenders will charge interest on your purchases if you continue using the card. It can be a great way to cover unexpected expenses and avoid paying interest immediately.
0% APR Cash Advance
0% APR cash advances from a bank or credit union are like payday loans because of the short-term repayment period you must respect.
Don’t want to use your credit card or take out personal loans? Try these cash advances from traditional banks and credit unions. You can use one without affecting your credit score. It makes them good options for people who don’t have many options because they have bad credit scores or no savings account!
Credit-Builder Loan
Consider a credit-builder loan if you want to improve your credit score. You can get these short-term loans and make timely payments that lenders will report to major credit bureaus. Credit builder loans have low-interest rates and flexible repayment terms that you can adjust according to your budget. Most lenders offer loan amounts from $500 up to $1,000. However, these can vary depending on your income and savings.
The time you have to repay the larger loan depends on how much money they’re willing to lend you and what kind of payment plan they offer. Depending on your situation, you might have between 1 and six months to repay the loan.
Home Equity Loan or Line of Credit
Both a home equity loan and a line of credit provide access to significant funds. A home equity loan gives you money in one lump sum, while a HELOC (home equity line of credit) allows you to borrow money more than once. It works like a credit card, with one difference: your home is used as collateral. Both loans are secured, which differentiates them from unsecured home improvement loans for bad credit.
A HELOC has a credit limit and a certain repayment period, typically around 10 years. During that time, you can use your line of credit to withdraw money (up to your credit limit) when needed.
Why Don’t We Recommend a Second Payday Loan?
We don’t recommend you take out another payday loan because you could get into a debt trap that is hard to get out of. A tough financial circle will crush your monthly budget and make you borrow more amounts you can’t afford to pay back.
Wondering “how many payday loans you can have” is challenging, but there is always a solution. If you have a financial emergency, we hope you’ll have this information at your fingertips.
FAQ
Do Payday Loans Hurt Your Credit?
Payday loans can hurt your credit if you don’t pay them back on time. If you miss payments, it will appear as a default on your credit report and negatively impact your credit score. It also makes it harder to access similar loans in the future.
How Many Payday Loans Can You Have at One Time?
The lending laws of your state regulate the number of payday loans you have at one time. In some states, you can borrow up to two payday loans at a time. But remember to assess your financial situation and see if you can afford the payments.
Can You Go to Jail for Not Repaying A Payday Loan?
No, you can’t go to jail for not repaying a payday loan. But if you can’t pay back the loan, that’s where things get tricky. You could get harassed by debt collectors who threaten legal action or even arrest if you don’t pay up.
