Personal loans provide a fast, easy and versatile form of financing for Australians across the country. While many seeking out this type of finance would only consider one at a time, there are ways that you can get another loan if you already have one. Find out more about how you can access two loans at the same time in this handy Savvy guide.

How many personal loans can I take out at once?

The answer to this question ultimately depends on your overall income. Although the general answer is two, this varies from borrower to borrower based on your individual circumstances. For instance, if you’re earning comfortably more than your current loan repayments and are looking to access more funds, you may be able to take out a second. Some mid to high income-earners may even be able to comfortably balance three loans’ worth of repayments at any given time, which is the absolute maximum someone can be approved for.

However, if you’re earning a lesser income and your lender only believes that you’re capable of juggling your existing personal loan on top of your other day-to-day expenses, you won’t be approved for a second finance deal. Some people may not even be approved for one based on their credit file and income. It’s important to stress that each applicant is different and can experience a different outcome when seeking out multiple personal loans. You’ll be approved for the volume of repayments that your lender is confident you can comfortably manage.

What should I consider when applying for another personal loan?

There are several key considerations in the process of determining whether an additional personal loan is the right move for you. Firstly, having multiple personal loan applications on your file can potentially make lenders more wary of you as a borrower. Not all lenders will be willing to approve borrowers for multiple personal loans, while others may be put off by a series of applications in quick succession due to the potential for you to find yourself trapped in a cycle of debt.

It’s also important to note that you’re unlikely to receive as strong a deal as what you did on your original loan due to the fact that your disposable income is now lower and that you’ve taken on more debt than you had previously. This can manifest itself in a lower loan amount than you were looking for or higher interest rates and fees on your newer loan, adding further to the overall cost of financing by up to hundreds or thousands of dollars.

Because of this, you’ll need to thoroughly think through both the amount you need and the repayments which you can afford prior to applying for further financing. It’s crucial that you only take on what you can manage financially, as it’ll be more detrimental to you to default on two personal loans compared to one. As such, you should also only ever apply for what you need. Whilst it might make sense to add another $3,000 to your loan for safekeeping, you have to consider that you’re paying hundreds of dollars in interest and fees on that amount alone and adding to your monthly repayments.

Should I look at refinancing my current loan instead?

Refinancing can be a highly useful alternative to applying for a second (or third) personal loan that could potentially save you money overall. A personal loan refinance is when you apply for another personal loan with a different lender for the express purpose of paying out your existing deal, allowing you to repay the remainder of your debt on more favourable terms. What they can also allow you to do, however, is add to your existing loan debt and lengthen the remaining term to add necessary funds and enable you to pay them at a manageable pace.

As such, you may find that simply refinancing your loan, adding however much you need to the new loan and altering the repayment term works out to be a more efficient way of affording access to more funds. The other advantage of this is that, if you’ve been repaying your loan debt for some time, you can capitalise on your positive repayment record and/or increase in your credit score to potentially land a more favourable offer, namely a lower rate.

It’s important to note, though, that some personal loan financiers may enforce fees for discharging your loan well ahead of schedule. While this isn’t the case for all lenders, you should always check to see whether they’re charged in the event of an early refinance. You may find that the fees outweigh the benefit of refinancing altogether and that you’re better off applying for a second loan.