Regardless of where they live and what they do, most people will get at least one personal loan during their lifetime. This is mostly due to the fact that these loans have low interest rates when compared to other types of consumer debt, which makes them attractive to a wide range of people regardless of income.
Personal loans are easy to take out, you do not need a perfect credit score for the bank to lend you the money, and repaying it is usually accessible enough to make their cost barely noticeable. However, what happens when you need a larger amount of money than what the bank would be willing to give you as part of the loan?
What you need to know about taking our several personal loans at the same time
The most important thing to remember when it comes to taking out multiple personal loans at the same time is the fact that there is no rule or law against it. This having been said, there are two ways in which you can get the loans:
- Get personal loans from multiple lenders
One of the easiest ways to get several personal loans at once is to borrow money from multiple lenders. This can either be done by going to your local banks and finding out which ones do not have any restrictions when it comes to this sort of financial move.
Keep in mind that some lenders will either have specific terms and conditions that you will have to agree to if you want to take out a second personal loan, while others may forbid this practice entirely. In other words, it depends solely on the internal policies of the bank that you choose to work with.
The alternative is to go to the bank and take out a personal loan if you need to get money now, and then to use an online money-lending service in order to get another one. This is usually easier to do because most of these online platforms do not perform credit checks or ask that you provide them with detailed financial records.
Generally speaking, there is nothing stopping you from using 10-20 online lending platforms in order to borrow money, however, remember that each of them may have different eligibility requirements.
- Get several personal loans from the same lender
This practice is more common than most people may think, and a large number of banks actually advertise this possibility. A good example would be refinancing a loan or debt consolidation. This having been said, it is also possible to take out two or more personal loans from the same lender. You will, however, have to have a great track record with the bank and also have a good credit score.
Be smart when it comes to borrowing money
Although borrowing money from the bank is often less expensive than using your credit card, do not forget that taking out several personal loans at once can still cause you to bleed money. Furthermore, if you cannot make the monthly payments on time, not only will your credit score go down, but the banks will be reluctant to give you any more money in the future.
Generally speaking, the best course of action, if you need more money than you can get with a single loan, is to borrow money from your bank and then to look at what online services you can use to get more. These web-based lending platforms do have higher interest rates when compared to banks, but if you shop around you should be able to find loaning options that are more affordable than using your credit card.
The golden rule here is to only borrow money from online platforms if you either need to buy something very expensive or if you are in a rush and do not have time to get a loan from the bank. Also, keep in mind that these platforms will not perform credit checks and will also not report the transactions to any of the main credit companies. This means that they can be used regardless of your credit score and that borrowing money from them will not affect your permanent financial records.
Taking out several personal loans at once should never be taken lightly. Although this financing option is more attractive than making payments using your credit card, the costs of the loans can quickly add up and put you in a difficult position. Furthermore, a larger number of loans means that the risk of lowering your credit score is greater.
While it is possible to take out multiple personal loans at the same time, only do so if you need the money. Do not treat this financial strategy as an easy way to borrow large amounts of money, but as a “get out of jail for free” card, in case you urgently need a lot of money.