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Is it bad to have two personal loans?


It’s not uncommon for one to take out a personal loan or multiple loans, only to find out that your expenses are way more than what you borrowed or another expense has popped up. In that case, taking out a secondary personal loan might help you cover the cost – but is it really a good idea to have two personal loans at once?

Would a lender allow you to take out another personal loan? Yes, some would, but only if you’ve proven yourself as a low-risk borrower by paying your initial loan on time, and have paid off part of its initial balance.

Beware of Over Borrowing


Before even entertaining the idea of taking out a second personal loan, you might want to think long and hard about it especially if you’re a casual worker.  Taking out a second personal loan increases the overall cost of your loan, which increases your monthly payment, making it difficult for you to repay your loan. And if managed poorly – you might find yourself stuck in a cycle of debt.

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Things to Consider Before Taking Out Another Personal Loan


  •  Bad Loan Terms

Since you already have an existing loan, lenders may not be so generous about handing you another low rate personal loan, and if they do give you one, your loan terms may not be that good.

  • Increased DTI

DTI or Debt to Income Ratio is one of the metrics used by lenders to evaluate whether you are a low or high-risk borrower. Having a high DTI means that you’ll have a difficult time getting approved or get reasonable loan terms.

  • Affects Your Borrowing Power

Taking out a loan can be a good thing for your credit score if done moderately. But having too many inquiries on your credit score can severely impact your ability to take out a personal loan.

  • Deeper Problem

If you’re growing dependent on personal loans for your day to day expenses, then it’s likely that you’re in a debt cycle. You may benefit from other types of services such as loan refinancing or debt relief.

  • Multiple Loans Means More Monthly Payments

Having to deal with two personal loan repayments in a month means you have very little wiggle room in terms of finances. A slight change in your financial situation may make it hard for you to keep up with monthly repayments.

Still Want to Apply?


Pre-qualify for loans to compare rates. Many lenders will allow you to pre-qualify for a loan so that you may get a baseline of the kind of rates and terms you’re getting.  Lenders will only do soft credit pulls when you try to pre-qualify for a loan, meaning it won’t affect your score in any way.

Bottom Line

Having two personal loans isn’t necessarily bad, especially if managed properly, but it will still have some negative implications on your credit. Over borrowing is also a big concern when it comes to having two personal loans at once.

On the positive side, a second loan can be a great source of funding if you’re a bit wee short than anticipated, provided that you have the ability to pay two personal loans at once.