How Many Payday Loans Can You Have At Once?

How Many Payday Loans Can You Have At Once?


8 Min Read

Payday loans are known for being a quick and easy way to get extra cash. But sometimes, one payday loan is not enough to cover your urgent needs due to the limited loan amount it offers. So that’s the question: how many payday loans can you have at once? The answer depends on several factors. They include but are not limited to stipulations of a particular payday lender and the laws and regulations in your state.

In general, it’s possible to have multiple payday loans at the same time. Yet, the exact number of loans you can have in a year varies greatly depending on your location. Some states have stricter regulations on the number of payday loans, while others have more lenient laws. In this article, we will explore different factors that determine how many short-term loans you can have and provide some tips on how to manage multiple loans at the same time.

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Can I Get Another Payday Loan If I Already Have One?

Long story short. Yes, it is possible, but not everywhere. Let’s delve deeper into the topic.

In some states, you are allowed to obtain as many small loans as you need. In others, your options are limited to one or two payday loans at once. The lender you choose can also have its own conditions. Some payday lenders may not allow you to take out a new loan if you already have an outstanding one with them. Others may set restrictions on the amount you can borrow.

Also, you need to keep in mind that your income plays a role too. Your loan provider will consider your solvency before making a loan decision. If you’re overburdened with debt, this places you in the group of potentially risky borrowers. Thus, you can get rejected for additional payday loans, even if it’s allowed to have several in your state.

can I get another payday loan if I already have one

Why May Lenders Restrict Me from Having Multiple Payday Loans at The Same Time?

There are several reasons why they may do so:

  1. Payday loans are typically high-interest short-term loans that can put borrowers in a spiral of debt. These loans are often targeted at people with credit issues and below-average incomes who already experience financial problems. If a borrower can’t pay off debt on schedule, they will have to start a rollover and pay additional fees or obtain another short-term loan to cover the previous one. This way, allowing borrowers to take out several payday loans can lead to even more financial hardship.
  2. Having more than one payday loan at once increases the risk for the lender. This is because the borrower may struggle to repay the loans and default on the debt. As a result, administrative costs and time for the lender to pursue debt collection will increase.
  3. Some states have laws and regulations that limit the number of payday loans a person can have in a year. This can also be applied to the amount they can borrow. Therefore, if a lender works according to the law, it won’t be able to give you more loans than it’s allowed.

How Would a Lender Know That I Already Have an Existing Payday Loan?

The Consumer Financial Protection Bureau put the guideline for lenders to screen all potential borrowers. This means that before giving you loan proceeds, a payday lender will check your loan application details to estimate your creditworthiness and solvency. Additionally, you need to provide your bank account and pay stub information.

Although a payday loan lender doesn’t review your data through major credit bureaus, it still needs to make sure you can repay the money. A soft screening will show not only your payment and credit history but also whether you have any other existing debts. Thus, if your state law restricts borrowers from having more than one payday loan at the same time, your chances of getting another loan are close to zero.

How Many Outstanding Payday Loans Can I Have By State?

In the table below, we’ve taken into consideration only the states where payday loans are permitted or allowed with restrictions.

State Number of Outstanding Loans
Alabama 1
Alaska 1 (2 rollovers are allowed)
California 1
Colorado Unlimited (the amount of all outstanding loans can’t exceed $500)
Delaware 1 (4 rollovers are allowed)
Florida 1
Hawaii 1
Idaho 1 (3 rollovers are allowed)
Illinois 2
Indiana 2 (1 loan from 1 lender)
Iowa 2
Kansas 2 from 1 lender
Kentucky Unlimited (the amount of all outstanding loans can’t exceed $500)
Lousianna Unlimited
Maine 1
Michigan 2
Minnesota 1
Mississippi Unlimited (the amount of all outstanding loans can’t exceed $500)
Missouri 1 (6 rollovers are allowed)
Montana 1
Nebraska 1
Nevada 1
North Dakota 1 (1 rollover is allowed)
Ohio 1
Oklahoma 2 (with a maximum amount of $1,500 in total)
Oregon Unlimited (the amount of all outstanding loans can’t exceed $50,000)
Rhode Island 3 per year (no more than $500 each, 1 rollover is allowed)
South Carolina 1
South Dakota Unlimited (the amount of all outstanding loans can’t exceed $500, 4 rollovers are allowed)
Tennessee 2 (no more than $500 in total)
Texas Unlimited
Utah Unlimited
Virginia 1
Washington State 8 per year (no more than $700 in total at once)
Wisconsin Unlimited (the amount of all outstanding loans can’t exceed $1,500, 1 rollover is allowed)
Wyoming Unlimited

However, you need to bear in mind that the data above are approximate. This is because a lender can have its unique restrictions too. Also, your financial situation and credit score can affect the number of loans you can get.

Is a Second Payday Loan Worth Getting?

Many people consider payday lending a predatory form of borrowing. According to Bankrate, the average payday loan default rate is 20%. For comparison, the typical credit card default is only 6%. Thus, such an opinion is not groundless.

First of all, you need to remember that payday loans come with high interest rates. Moreover, the more payday loans you have, the worse will be the terms of the next ones. You’re more likely to get a higher annual percentage rate that you need to pay in addition to your initial loan amount. That is why it’s important to consider your financial situation and ability to repay the loans before you take out another one.

As payday loans have short repayment terms, it may be difficult to manage multiple debts. Sometimes taking out another online payday loan may only make your situation worse. Try to obtain a payday loan only in case of a desperate need or consider available alternatives.

multiple payday loans

Affordable Alternatives to Payday Loans

If you need more than one payday loan but can’t (or don’t want to) obtain it, here are some options you can turn to instead.

Traditional Personal Loans

These loans are offered by conventional financial institutions, such as banks and credit unions. Traditional financial products are usually cheaper and offer more flexibility. But people with low FICO scores can face difficulties due to mandatory credit report checks that traditional lenders conduct.

Installment Loans for Bad Credit

While paycheck loans have a due date by your next payday, installment loans for bad credit can be repaid in parts within several months or years. These loans suit those with poor credit scores but may turn out to be even more expensive. This is because of longer repayment terms.

Cash Advance App Options

A cash advance app is a platform that you can install on your smartphone and use as needed. Cash apps usually offer no credit check loans, which can be a good alternative to traditional payday loans. You can find apps that don’t charge interest and get a reasonable solution for your emergency expenses.

Title Loans

If you’re a car owner, a title loan allows you to get money by using your vehicle as collateral. Title loans are usually cheaper than payday ones but also come with the risk of losing your car in case of non-payment.

Borrowing from a Family Member

Another way to get the money you need is to ask your loved ones to help. This option usually comes with no or a very low interest rate but can also affect your relationship if you fail to repay on time.

Bottom Line – How Many Loans Till Payday Can I Have?

The number of payday loans you can have can be determined by your financial situation and the state you’re living in. In most states, the number of outstanding loans you can have at the same time is one or two. However, there are states that have no such limits. Also, there can be restrictions on borrowing from the same lender and limits associated with the total amount you can have in debt at one time.

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Edward Evans

Written by Edward Evans

Written by Edward Evans

Edward Evans is a money management expert and a freelance author of personal finance columns. He aims to provide accessible financial advice to improve financial literacy for average Americans and inspire them to take control of their personal finances and build wealth.