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How Many Personal Loans Can You Have At Once?

Technically, there are no defined limits to how many personal loans an individual can take out at any time, but many lenders will restrict individuals to two personal loans.
While some lenders may not have a hard limit on how many personal loans they will lend an individual, having more than one personal loan (or other types of loans), makes it more difficult to qualify for additional loans with good terms.
This post will explain why it can become problematic to have too many loans at once, providing everything you need to know to ensure that you’ll get the best terms and conditions on your next loan.
At Credit Union of Southern California (CU SoCal), we’ve provided low-interest personal loans to Southern Californians for over sixty years, and we’re loved by our Members for our remarkable services and affordable fees.
Even if your credit history isn’t perfect, don’t worry, because unlike a traditional bank, we don’t think that your credit score tells the whole the story. Come in and talk to us and let’s see what we can do!
To learn more about personal loans call CU SoCal at 866.287.6225 and schedule a no-obligation loan consultation or apply online for a personal loan today!

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What Are Personal Loans And How Do They Work?

Personal loans are a type of “unsecured loan” (no collateral, such as a home or assets, are used to secure the debt). To get a personal loan, you may complete an application at a credit union or bank.
There are online lenders that offer personal loans as well. A personal loan is typically granted to an individual based on their creditworthiness and ability to repay the loan.
Personal loans can be used for a variety of purposes. Some common uses include paying medical bills, consolidating high-interest debt, starting a business, or covering a large expense, such a wedding, tax lien, or college tuition.
Learn more at, “What Are Personal Loans?

How Do Personal Loans Work?

Applying for a personal loan is easy. Personal loans are available from credit unions, banks, and online lenders, in amounts that can range from $100 to $100,000. The amount you can get approved for will largely depend on your credit score, but monthly income and expenses will also be considered during the application review process.
No matter what amount you get approved for, you should fully understand what the payback terms are and what your monthly payment will be. Although you may qualify for a larger amount than you need, be honest with yourself about whether or not you can comfortably afford the monthly payment. Failure to repay the loan on time can result in a damaged credit score, which would prevent you from being approved for other subsequent loans and credit.
The best place to start shopping for a personal loan is where you do your banking now. Your credit union or bank will have quick access to your account information that will help speed-up the loan approval process. Your current bank can provide you with options even if you have a low credit score or no credit history.
Information needed to start the application process includes:
  • Name
  • Address
  • Social security number
  • Date of birth
  • Phone number
  • Proof of employment
  • Gross monthly income
  • Your total monthly expenses
There are several types of personal loans choose from, and these can be secured and unsecured personal loans. A secured loan requires that you use one of your assets as collateral to “secure” the loan, which is a promise to the lender that they can take that asset if you fail to repay the loan in full. Unsecured loans do not require any form of collateral, meaning you don’t have to promise any assets to secure the loan.
Each lender will offer unique interest rates, loan terms, fees, and possibly a prepayment penalty, so be sure to get all the details before you sign.
Taking two personal loans out at once may not be allowed by lenders, and you would likely be encouraged to take just one loan. If you already have more than one personal loan, it may be impossible to get additional loans.

What Can Personal Loans Be Used For?

A personal loan is a loan provided to an individual by a lender for an unspecified use. In other words, a personal loan can be used for whatever you need, with no restrictions. Once you receive the loan funds in your account, you withdraw the money as you need it, and you’ll need to make monthly payments toward the repayment of the loan.
Some common personal loan uses include home renovations, paying medical bills, consolidating high-interest debt, paying off credit cards, and covering a large expense such as a wedding, funeral, tax lien or college tuition.
There are pros and cons to some personal loan uses, so you should always research all your loan options, interest rates, and payment terms before you sign to accept personal loan funds.
For example, if you need to buy a car, getting an auto loan would work better than a personal loan because dealerships and manufacturers provide financing incentives and you may get a lower interest rate than you would using a personal loan to buy the car.
Learn more about what personal loans are used for.
Once approved for a personal loan, the money will be deposited into your account and you may use it for any expense you may have.

Getting and Qualifying For A Second Personal Loan

If after receiving a personal loan you need additional money, you may be able to get approved for a second loan. Here are some factors to consider:
Using The Same Bank/Credit Union. Doing an application with your current lender could save you time and money. They will have your personal information on file, making the application process quicker. And, you may be offered a better interest rate or other savings, such as waived or lower fees.
Debt-To-Income (DTI) Ratio. DTI is calculated by adding all of your monthly debt payments and dividing that number by your gross monthly income. For example: If you pay $1,800 a month for your mortgage and pay $350 a month for an existing personal loan, then $1,800 + $350 = $2,150 monthly debt. If your gross monthly income is $6,000, then your debt-to-income ratio is 35%. ($2,150 ÷ $6,000 = .35). Most lenders look for DTI under 43%.
Credit Score. The higher your credit score the easier it will be to get approved for a personal loan and the lower their interest rate will be. Even if you have “good” (690 to 719) or “fair” (630 to 690) credit, you may still be able to get approved for the loan, but at a higher interest rate.
Is it bad to apply for multiple personal loans at once? Applying for two loans from different lenders could ding your credit score and look suspicious. It’s best to apply with one lender for the full amount you need.

Risks Of Taking Out More Than One Personal Loan

Many people want to know, “how many personal loans can you have at once?”
It is possible to have at least two loans at the same time. This usually happens when the loans were approved at different times and even years apart.
While taking two personal loans out at once may sound like a good idea, there are several reasons why this could be a risky:
Hurting Your Credit Score. Credit scores take into account factors including types of debt, credit use, balances owed, etc. A second loan could work against you by reducing your credit score.
Accumulating Too Much Debt. Another loan means another monthly payment. The more money people owe the more at risk they become for not being able to pay it off.
Not Being Able To Make Your Monthly Payments. Failure to make your monthly payments will be reported to the credit bureaus by the lender. This course of action would ruin you credit score.

When Is It A Good Idea To Take Out More Than One Personal Loan? It is only smart to take out a second personal loan if you have the financial means to make on-time payments on both loans, and pay them off within the specified terms of the loan agreement. Individuals with unsteady employment and income should think twice before using a personal loan to fill a wage gap, even it they can get approved for the loan.

Managing Multiple Personal Loans

If you do get approved for a second personal loan you’ll be expected to start making a monthly payment on the new loan right away. Here are some tips to help you manage your loans:
  1. Never miss a payment.
  2. Use automatic billing and auto-payment options that are linked to your bank account so you won’t be at risk for forgetting to make a payment.
  3. If neither of the loans has a prepayment penalty, consider consolidating the two loans into one, if you can find a lower interest rate.

Personal Loan Alternatives

There are credit alternatives designed for people with no credit or bad credit. These include the following:
Nonprofits, Charities, And Religious Organizations. If you are struggling financially, community and religion-based organizations offer resources including food banks, clothing, and emergency housing options. Some can also help with matching people in-need with work opportunities and financial assistance.
Explore Options To Pay Off Bills. If you need money to pay off debt, this could be a good time to consider debt consolidation to pay off or pay-down your bills, especially if you have large outstanding balances. Your credit union or bank can provide you with options, so you can pay-off bills at a lower interest rate, freeing up money to use on other expenses.
Paycheck Advances. Some employers offer a program which pays employees in advance of their usual payday. If this option is available, be sure to ask about fees and payback conditions.
Family And Friends. Borrowing money from a family member or friend can be a quick way to get the money you need if you have poor credit and don’t qualify for a traditional loan. While borrowing from family or friends can be tempting, it’s important to create a document stating the conditions and duration of the loan and whether or not you are expected to pay interest, and if so, at what rate. Your family member or friend and you should both agree to the terms and sign the document. Loans from family and friends have emotional attachments that could negatively impact your relationships.
If you have been turned down for a personal loan due to a credit issue, check out these tips on How to Rebuild and Improve Your Credit Score.

How To Decide If A Personal Loan Is Right For You

Deciding whether or not to take out more than one personal loan is a major decision. Here are some questions to ask yourself before you apply for more than one personal loan:
  1. Can you afford the monthly payments?
  2. Are you taking on more debt than you can financially handle?
  3. Do you anticipate paying off one or both loans in the short-term?
  4. Will taking out a second loan improve your financial situation or just add to your debt?

CU SoCal Personal Loans

CU SoCal is helping Southern Californians get the funds they need to pay for life’s necessities. Our personal loan features include:
  • Financing from $500 to $30,000
  • Rates as low as 2.50% + Share Certificate Rate
  • Terms up to 120 months for the lowest possible monthly payment
  • Line of credit option for access to funds when you need it
  • No application fee
  • No prepayment penalty
  • No funding fee  
Learn how CU SoCal can help you with a personal loan at, CU SoCal Personal Loans

Why Savvy Consumers Choose CU SoCal

For over 60 years CU SoCal has been providing financial services, including: personal loans, car loans, mortgages, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation consultation with a personal loan representative. 
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Credit Union of Southern California (CU SoCal) is a leading financial institution empowering those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County to reach their goals and build strong financial futures. CU SoCal provides access to convenient money management services and offers competitive rates and flexible terms on auto loans, mortgages, and VISA credit cards—turning wishing and waiting into achieving and doing.


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