How Many Payday Loans Can You Get?

Payday loans can be a great way to resolve your financial issues, especially for people behind on their instalments and loan payments. But what happens if one payday loan isn’t enough?

Is it possible to take out many payday loans at one time? And, if so, how many payday loans can you get?

If you’re interested in learning the answer, make sure to keep reading. We’ll tell you all you need to know about multiple payday loans and more. So, let’s get started, shall we?

What this article covers:

• How Many Payday Loans Can You Have at One Time?
• When Is It Okay to Get 2 Payday Loans at Once?
• Can You Get Multiple Payday Loans if You Go to More Than One Lender?
• What Are the Drawbacks of Applying for Multiple Payday Loans at Once?
• Can Multiple Payday Loans Help Improve Your Credit History?
• How Long Does It Take to Get Approved for a Second Payday Loan?

How Many Payday Loans Can You Have at One Time?

Technically, you can get as many payday loans as you want. However, that’s not applicable in real-life scenarios.

At most, you’ll be able to get 2 or 3 payday loans. That’s because the more payday loans you get, the riskier of a client you become and, therefore, the stricter the eligibility criteria get.

Imagine if you were a lender; would you be willing to give out money to a client who hasn’t even finished paying off their previous loan? No, you probably wouldn’t. You’d be unnecessarily risking your money. 

That’s why most lenders rarely give multiple payday loans at one time. However, if your financial situation isn’t too alarming, you’ll probably be able to get two and sometimes even three payday loans from the same lender. And a word of advice, that’s the most loans you can get without putting yourself at risk of endless debt. 

When Is It Okay to Get 2 Payday Loans at Once?

The first thing you should understand about payday loans is that they’re only suitable for short-term financial crises. A good example of that would be running out of money before your next paycheck or having a sudden emergency expense. In these cases, a payday loan will help you make ends meet without putting you in serious debt. 

Conversely, payday loans should be your last resort if you’re in severe financial trouble. Why? Because payday loans can get crazy expensive. 

You see, payday loans are unsecured loans that are rarely reported to credit bureaus. As such, many lenders attach to them unreasonable fees and payday loan interest rates. So, the more payday loans you have, the more you’ll find yourself in debt, crawling deeper with no way to get out. 

That being so, you should never apply for a second or third payday loan if you’re trying to resolve a long-term financial issue. Your loan application probably won’t even get accepted, and if it does, you’ll only be harming yourself in the long run. 

Can You Get Multiple Payday Loans if You Go to More Than One Lender? 

In theory, this could work, but it almost never does. 

As previously stated, payday loans are basically never reported to credit references like Equifax, Experian, and Illion. So, theoretically, other lenders wouldn’t know that you’ve already taken out a payday loan. 

However, you need to keep in mind that lenders always ask to see your bank statements before approving you for a loan. As such, they’ll be able to see if you’re making payments to other lenders or struggling to get by. 

Most payday loan organisations also perform a credit check so that they can see if you’ve defaulted on a previous loan.

So, even if they don’t have proof you’ve already taken out a loan, they can deduce it. Accordingly, it’s highly likely they’ll refuse to give you a payday loan. 

What Are the Drawbacks of Applying for Multiple Payday Loans at Once? 

Unfortunately, there are multiple disadvantages of payday loans. So, let’s see what they are.

Debt Default

Since payday loans can be expensive, you can easily end up accumulating late payment fees. With time, the fees may become too steep until you have no choice but to default on the loan. 

Accordingly, you should always have a sound payment plan before taking out a second or third payday loan.

Worsening Your Credit History

Getting multiple loans in a short period negatively reflects on your credit history, especially if you don’t make your payment on time or default on a loan. 

That’s because multiple loans give the impression that you’re not handling your finances well, and that’s exactly the reason second payday approval rates are significantly low. 

In short, the more loans you take out, the worse lenders will look upon your credit history and the less likely they’ll be willing to give you a loan. That is, of course, until you finish paying off the previous loans. 

Can Multiple Payday Loans Help Improve Your Credit History?

Sadly, no.

That’s because payday loans aren’t reported to credit bureaus. So, even if you manage to fully repay your loans in a timely manner, this will all go unrecorded. As such, your credit score won’t go up, no matter how many loans you repay. 

On the other hand, if you fail to repay the loan, the lender will make sure to report this action. In turn, the default will go down in your credit history, and your credit score will plummet further.

How Long Does It Take to Get Approved for a Second Payday Loan?

Quite a while, actually. 

That’s because the lender has to run a thorough credit check and carefully examine your financial situation. Then, they’ll have to weigh the risk with the benefits to decide whether it’s safe for them to give you a second loan.

Of course, the exact timeframe will differ from one lender to another. However, it generally takes a week to get a decision. 

So, if you’re hoping that a second payday loan can be a quick way to get some extra cash, you’ll be better off looking for an alternative.

FAQs

What Is a Payday Loan?

What is a payday loan? Payday loans are small-sized unsecured loans that range from $500 to $5,000. Usually, payday loans must be repaid in 16 days to a year. 

Why Are Payday Loans Called So?

Typically, the monthly instalment date of a payday loan is set according to the borrower’s payday, hence the name. Still, you can hear payday loans referred to as cash advances, urgent loans, fast loans, instant loans, etc. 

How Much Does a Payday Loan Cost?

This depends on how much you borrow. If your loan is $2,000 or less, you’ll only be required to pay a 20% establishment fee and a 4% monthly maintenance fee. If your loan is larger than $2,000, you’ll pay an establishment fee and interest rate that’ll vary from one lender to another. 

Can You Get a Payday Loan With Bad Credit?

Generally, a payday loan doesn’t have as strict criteria as a personal loan. As such, even if you have less than optimal credit, you’ll be able to find a lender willing to give you the money. Also, there are some lenders who don’t perform a credit check, making them the best payday loan for bad credit borrowers.

What Are the Eligibility Criteria of a Payday Loan?

To get a payday loan in Australia, you need to be over 18 and an Australian resident/citizen. You also need to have an active bank account and proof of income.

Conclusion

Getting many payday loans at once can be a double-edged sword. Unless you’re confident you can repay the second loan on time, it’s best you look for another way to get the money you need. Otherwise, you’ll gradually sink into debt, and your credit score will take a major hit.