How many payday loans can you have at one time?

How many payday loans can you have at one time?

This depends entirely per lender and many will set restrictions on the total amount of payday loans you can have at any one time.

Why you shouldn’t take out more than one payday loan

There are a number of reasons why you shouldn’t take out another payday loan while still making payments on the one you already have. We’ve taken a closer look at these here:

Payday loans are not meant to be long-term solutions

Payday loans are intended to be a quick way to solve a one-off, emergency need for cash. They should only be considered when you’ve exhausted all the other ways of accessing the money you need quickly, such as withdrawing from savings or borrowing from a friend or family member.

Repeatedly taking out payday loans can become an extremely expensive way to borrow money as time goes on. What was supposed to be a quick fix for a short-term emergency can become a long-term issue if you find yourself borrowing from one lender to pay another.

Juggling multiple payments to different lenders can not only become difficult to stay on top of from an admin point of view, but it will also become more expensive. With the added interest and the requirement to pay back in full within a short time frame that often comes with payday loans, trying to pay more than one back can take its toll on your finances in the long run.

It can have a negative effect on your credit score 

The very nature of payday loans means that if you apply for even one a month, this will add up to a number of searches on your credit report quite quickly, and this will have a negative effect on your credit score. This is because every time a lender performs a credit check, this is noted on your credit report.

Applying for a number of loans or credit accounts, and so having a lot of searches on your report in a short period can be a sign that you’re in a difficult financial situation and may not be able to pay back what you borrow. As a result, this behaviour will have a negative effect on your credit score.

Your credit report also lists every credit check that has been performed on you, so other lenders can see how many applications you’ve made, what kind of loans or credit accounts you’ve been applying for, and whether you’ve been successful, which may factor into their decision when you apply to them.

If you are struggling to repay a payday loan on time, take a look at our in-depth guide for tips on things you can do to help you pay them back in an affordable way. If you feel like you are experiencing financial difficulty, then you may wish to seek free and impartial debt advice from a not-for-profit organisation like StepChange or the Money Helper.

What can I do instead of taking on another payday loan?

This depends entirely on your situation but here are some suggestions:

• You could look into an alternative solution – Using savings if you have them, or borrowing from family and friends may be a better alternative to avoid paying interest on what you borrow.
• Sell an unneeded item – Having a clear-out and selling your unwanted and unneeded items can be a great way to find some extra cash that may be enough to cover an unexpected cost. The more valuable the items you can sell, the more you’ll make. This could be anything from a bike that’s no longer used to a games console that is rarely turned on. You can even make a good amount of money from selling DVDs you don’t watch anymore!
• Look at where you can cut back – We’re all guilty of spending a little more than we should on treats and entertainment. Temporarily cutting back on luxuries like Netflix, buying food and drink while you’re out, and takeaway food can build up enough money to fund an emergency expense – and you may find you don’t even miss them!
• Seek out free and impartial debt advice – The Money Helper and StepChange have helpful guides and advisers available to guide you through a tough financial situation. Speak to them if you feel you’ve exhausted all other options as they may be able to help you find another solution.