A harsh reality when looking at your finances and realizing that you need to consolidate to afford the debt you’ve accumulated or to afford an unavoidable expense is that your income is not sufficient.
That can be tough with the economy being as it is. Sometimes it might be necessary to see if the boss will tack on a few extra hours or offer a more high-paying position in your field.
You might even want to consider a side gig even if it needs to be in a different field before you consider adding to the debt when there’s another need depending on whether you have time to save for the expense.
If you can’t delay the cost, the next best option is a foray into consumer loans – check out billigeforbrukslan.no/lan-pa-dagen/ (translation: billige – cheap, forbrukslan – consumer loans, lan – loan per day/lan-pa-dagen: loan on the day) for details.
Sit with a financial counselor or a loan calculator to ensure you can repay the installments before taking on another debt that could be detrimental to your financial circumstances to where you can no longer sustain your monthly obligations.
But what if you take the loan and find that it isn’t sufficient for your needs? You miscalculated. Can you get more than one loan at a time? Let’s see.
Can You Get Multiple Consumer Loans At One Time
Suppose you’re looking into taking a personal loan for debt that accumulated due to not having sufficient income to sustain your lifestyle. You’re either faced with an emergent need, unavoidable expense, or a need to consolidate these high-interest debts to live comfortably once again.
After going through the process and receiving the funds, you find that the amount you receive isn’t enough. But will a lender provide more than one loan at a time, or is it necessary to pay the existing loan in full before attempting to get another one?
The decision is generally up to the loan provider. Some won’t allow another loan simultaneously with the first. Still, others might be more generous with their decision but expect you to prove reliability with repayment by making installments for a particular period before they approve.
There will generally be a cap on the borrowing amount between the loans also. Taking another loan simultaneously can impact your credit rating significantly and affect your financial circumstances severely.
Considerations Before Taking Another Consumer Loan
When considering the option of another consumer loan, the advantages will be based on your current circumstances.
No one should assume more debt than they need to. It’s impossible to determine when life will happen, requiring funds to handle emergent situations creating a hardship for you financially. Look at a few downsides to taking on the responsibility of multiple consumer loans.
● Debt cycles
A debt cycle is when you take a loan to clean up your debt but invariably continue to create more obligations with a need to take more loans to clean these up. With multiple loans, the monthly installments eventually add up to a point where the repayments become a challenge when combined with standard monthly expenses.
In those situations, people tend to go back to leaning on high-interest credit cards to sustain them with their monthly living expenses. It’s at this point, a financial counselor’s advice needs to be sought to go over the finances and the monthly income to see where changes can be made to get into a better situation.
First and foremost, a budget needs to be established, and the credit cards need to be paid and put away where there will be no temptation to use them.
It would then be wise to combine the multiple consumer loans into one payment (if a lender would be willing to take that risk) and progress forward, understanding the budget would need to be stringently followed to afford all expenses plus develop a savings and emergency fund.
● Credit rating and report
Taking multiple loans has a significant impact on your credit report and overall score. Generally, inquiring into your credit report will make the credit score drop to a degree.
The dip might not show up immediately, but it does soon after there is an official loan application. There will be more inquiries into the report and history and, therefore, more dips in the credit score when there is another application process.
What Are Alternative To Multiple Loans
When it becomes apparent that you’re having financial difficulties to the point the personal loan you took is not sufficient, so you’ll actually need a second one, it’s wise to look into some potential alternatives before taking such a significant step. Some other options to consider:
For an expense that could be delayed for some time, there’s the option of avoiding a personal loan by funding a “dedicated savings account” and accumulating the money to pay cash instead of creating significant debt.
– Consolidating the debt
Rather than adding another debt to your monthly expenses, it might be wise to consolidate the current loan along with debt accumulated, such as high-interest credit cards, into another consolidation loan for a single payment. The credit cards at this point would need to be stashed away to avoid further temptation.
– Payment options
If you have an emergency that arises that you can’t afford with your current expenses and it’s necessary to seek a second loan in an effort to pay maybe medical costs, approach the provider regarding the possibility of payment arrangement.
Especially in the medical industry, they will work with patients who have difficulties paying large account balances.
When you see that the one personal loan you take out is not sufficient for the expenses you have, it is possible with some lenders to get a second loan with stipulations. It’s not necessarily the wisest move for your financial health unless there is a dire circumstance. That’s where careful forethought will come into play.