Payday loans appear attractive in times when you need urgent money. In usual terms, a payday loan is a sum of several hundreds of dollars you borrow for two to four weeks, often coinciding with your payment day. Can you have two payday loans at once? These loans are accessible to anyone regardless of credit history, as they provide quick financial assistance.
However, according to the Consumer Financial Protection Bureau, such loans come at a price since their interest rates can be as high as 400%. Moreover, people may only be allowed to take two payday loans if they have repaid their previous loans. The chances of getting new loans are limited if pending debts exist.
Furthermore, any possibility of getting two payday loans will depend on the borrower’s profile and the lender’s regulations and policies. Let’s understand the critical details about getting two payday loans in the United States simultaneously.
Understanding Payday Loans
A payday loan can only be taken once the previous one is returned. Another payday loan depends on the borrower’s profile and the lender’s operations. In general, three business days must elapse after settling the previous payday loan before one applies for a fresh one.
If another lender has an overdue debt, creditors could look for new payday lenders. Creditors will assess these lenders, and the financiers themselves will decide whether to grant or refuse these loans.
Payday loans are short-term advances with high interest payable on your next payday. Taking out multiple loans may initiate a vicious cycle of debt and financial instability. These are high-yielding advances that should be paid back on your next payday.
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Legal and Regulatory Considerations
Clients who fail to return the loan before the two-week deadline can ask the lender to roll over the debt. If the state allows it, the borrower pays only the applicable fees. However, interest rates and finance charges keep increasing.
- The lender must not accept an automobile title as collateral for a loan, unlike title loans.
- A lender cannot give a loan to a consumer with another short-term loan.
- However, such lenders can only extend loans to borrowers who have paid at least one-third of the principal balance on every extension.
- All borrowers must be informed about the Principal Payoff Option by lenders.
- If insufficient funds are in the borrower’s account, lenders should not try to pull money out more than once.
Financial Implications of Multiple Payday Loans
If you cannot return the loans – according to the Consumer Financial Protection Bureau, 80% of payday loans are not repaid within two weeks – the interest rate skyrockets, and the amount owed grows, making repayment nearly impossible.
A payday loan is one of many options to address a sudden bill or settle an outstanding debt because it takes more money to solve your problem with a payday loan than the one you are trying to solve. It costs much more than you’d pay for being late or getting your check bounced. Lenders scrutinize borrowers’ earnings, living costs, and significant expenses like mortgage and car payments. This often involves pulling out a credit report. Try Beem app to check top loan options, personalized rates and explore best personal loan options amid financial crisis.
Lender Policies on Multiple Loans
If “a customer uses quick succession” payday loans on three separate occasions, the lender must stop giving them for 30 days. Again, borrowers can only take out multiple payday loans at once if they can show that they can pay them back in full.
They can continue if the lender needs more money to withdraw from the borrower’s account. After two attempts to make payment, they must reauthorize the payment method with the borrower.
Alternatives to Taking Multiple Payday Loans
Let’s take a look at some of the alternatives to payday loans:
- Apply for a “Bad Credit” Personal Loan
- Borrow from a Credit Union
- Personal Loans from Family or Friends
- Secure a Credit Card Cash Advance
- Get a Paycheck Advance From Your Employer
- Peer-To-Peer Loans or Lending Circles
Tips for Managing Payday Loan Debt
If you’re tired of borrowing from payday loan companies, have multiple payday loans, or want to know how to get rid of payday loan debt, here are five tips to keep in mind:
- Create a personal budget.
- Contact the Payday Loan Lender and inform them about your current financial situation.
- Set up a new bank account to prevent the worry that a debit for the whole loan amount will be pulled from your account.
- Plan for emergency expenses.
- Ask for help if you need it.
Conclusion
Even though payday loans are one of the most accessible loans for borrowers, the loan amount may depend on the borrower’s salary and other factors. It can be used to meet emergency expenses or debt consolidation. After considering the pros and cons of every loan provider, choose possible routes, decide which ones are feasible, and act accordingly.
Start working on your plan to repay the payday loans quickly and incur no further expenses. Furthermore, check out Beem to explore personal loan options ranging from $500 to $100,000 and get personalized rates without impacting your credit score.0 and get personalized rates without impacting your credit score.
FAQs
Can you get a loan from 2 different places?
Yes, you can get a loan from two different places. However, it is not advisable to get two different loans as you can fall deeper into the debt trap.
Do payday loans hurt your credit?
No, payday loans are not reported to the major national credit reporting companies, so they are unlikely to impact your credit scores.
Can you have multiple loans at once?
The simple answer is yes. An individual can take out more than one loan. But just like the first loan, you must meet the loan provider’s requirements for approval.
Can I get a second loan if I already have one?
Yes, you can often get a second loan if you already have one. But you will have to find a different lender to provide a loan. However, several factors will be considered when you take the second loan.