How Many Personal Loans Can You Have at Once?

So, you already have a loan, but an unexpected emergency means you need another cash injection. 

But is it possible to have another loan at the same time? The answer is yes as long as you can afford it. 

Australia has no universal legal cap on the number of personal loans you can have at once. 

Instead, lenders are subject to strict responsible lending legislation with affordability as the central criteria. 

In this article, we will look at the mechanisms that dictate how much you can borrow and how a lender assesses your suitability if you already have a loan. 

Legal Limits on Personal Loans

There is no Australian law that caps the exact number of active accounts you can hold at any one time.

In fact, it is very common for borrowers to have more than one loan for different purposes. 

However, the absence of a legal limit does not mean infinite borrowing power. 

Your actual constraint comes from the National Consumer Credit Protection Act (NCCP).

This includes strict responsible lending obligations, meaning that lenders must thoroughly assess your financial capacity before approving an additional loan. 

They review your income and expenses to ensure any new credit contract suits your budget without causing hardship.

This means your true borrowing limit is determined by the total repayments you can sustainably afford, rather than a maximum number of open accounts.

If you are ready for a new personal loan then click below to get started.

How Lenders Review Your Loan Application

Lenders consider a range of factors that can differ significantly from lender to lender. 

While the specifics will vary, the overall focus areas do not. 

Your Credit History (and current score), current debts, and affordability will be central to the outcome. 

Where things differ is how they gather the data and what is used to reach a conclusion. 

However, if we put aside the credit policies of an individual lender the one central calculation all have to make is whether you can afford the repayments. 

Affordability Assessment

Bank statements are often used to review your financial situation and calculate your income and expenses. 

There are three main checks to ensure another debt is manageable:

• Income vs expenses
• Current debts and repayment history
• Evidence of high risk transactions. 

If you have a surplus of cash at the end of each pay cycle that can comfortably cover the loan repayment then you will pass an affordability assessment. 

But remember, this is just one part of the overall approval process. 

Internal Lender Policies That May Cap Your Borrowings

While you may be able to afford an additional personal loan, if you apply to the same lender as your existing loans you may still be rejected. 

This is dependent on the lender’s internal credit rules which could dictate a maximum number of personal loans per person. 

Or, a maximum amount of credit for your risk profile. 

If you are below this, then you could be approved for a second loan or an increase to your existing loan, to keep things simple. 

You may be forced elsewhere if you have hit that credit limit, or you have already borrowed the maximum that a lender is able to offer. 

For example, a Gusto Cash MACC loan is only up to $5,000. 

If you borrowed the full $5,000, and in three months time needed another $2,000, you would have to look elsewhere. 

Will Applying for Another Loan Hurt Your Credit Score?

Every loan application requires a credit check, which temporarily impacts your score. 

A single enquiry is a standard part of borrowing and your score will rebound quickly once you start making (on-time) payments. 

However, several credit enquiries clustered together can be a signal of financial stress and will do much more damage to your credit score. 

So if you plan on applying for another personal loan you should wait at least 30-90 days after your previous loan was funded. 

Some general tips to protect your credit report: 

• Avoid applying with multiple lenders in rapid succession.
• Space out your loan applications over several months.
• Do not apply just to see if you will get approved. Be intentional. 

The type of loans you are applying for can also be problematic for future lenders. 

For example, if you are a regular user of payday loans instead of regular personal loans then this could be another red flag. 

Calculate If You Can Afford Another Loan

Your chances of loan approval depend on your surplus cash flow to support new debt. 

So, to protect your credit report you should have some idea that you can afford the repayments before you apply. 

The fastest way to do this is to just look at whether you are saving any money at the end of each pay cycle. And if not, why not? 

You may need to have a good hard look at your expenses before you apply for additional credit. 

Keep in mind that lenders also apply a buffer to ensure you can manage small changes in your outgoings and can still afford your repayments.  

As a general guide, workout your new repayments and add $100 a month (some lenders could be much more) to be sure you have a buffer built in. 

Only if your surplus cash flow exceeds this should you consider applying for the loan. 

If not, focus on reducing your current obligations until you are in a better position. 

Frequently Asked Questions

You Can Only Borrow What You Can Afford

You can have as many personal loans as you like at once if you can afford them, and a lender is willing to approve them. 

So technically, there is no legal cap on how many personal loans you can have at once in Australia. 

Your limit depends entirely on serviceability, credit behaviour, and lender policy. 

Also give consideration to how many loans you can reasonably manage at once! The more you have, the easier it is to make a mistake. 

If you would like to apply for a personal loan, or even consolidate smaller loans into a single repayment, then click below to get started with Gusto Cash.