When it comes to payday loans, you can have multiple loans at once from different lenders, or even the same lender if they allow it.
However, even though you can have multiple loans at once, it isn’t always a good idea to have more than one payday loan at the same time, as it can become difficult to stay on top of all the different payments coming out.
Plus, lenders will consider how many other payday loans you have when they review applications you make to them, and a high level of outstanding credit may impact their decision. Wherever you can, you should always pay back a loan in full before considering borrowing any more money.
However, there are occasions where a series of unexpected expenses or emergencies can leave you feeling as though you have no other option but to take two or more payday loans at once. Here, we’ve looked into this issue and the alternatives, should you need cash now but have a payday loan that you’re still making repayments on.
This depends entirely per lender and many will set restrictions on the total amount of payday loans you can have at any one time.
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.
This depends entirely on your situation but here are some suggestions:
Representative Example: Borrowing: £1000 for 18 months, Total Repayable: £1853.43, Total Interest: £853.43, Interest Rate (Variable): 89.9%. Rates between 9.3% APR and 1721% APR – your no-obligation quote and APR will be based on your personal circumstances. Loan term lengths from 3 to 36 months. Subject to lender’s requirements and approval.
Sunny Loans is a registered trading name of Upward Finance Limited, who is an introducer appointed representative of Flux Funding Limited, who is a credit broker, not a lender. Loan repayment terms are 3-36 month loans.
Warning: Late repayment can cause you serious money problems. For help, go to www.moneyhelper.org.uk.