As a general rule, you are only allowed to take out one payday loan at a time and the majority of lenders will not allow you to take out a second loan while you still have an unpaid payday loan.
- You are ALLOWED ONE payday loan only in states such as Ohio, Florida and California
- Colorado, Texas and Nevada ALLOW UNLIMITED payday loans open
| State | Number of Payday Loans You Can Have Open |
| Alabama | 1 |
| California | 1 |
| Colorado | Unlimited |
| Florida | 1 |
| Iowa | 2 |
| Maryland | 0 |
| Illinois | 0 |
| Nevada | Unlimited |
| Ohio | 1 |
| Texas | Unlimited |
How Many Payday Loans Can You Have Out At Once?
In the majority of cases, you can only have one active payday loan at one time, although this will depend on the state that you are in and on the lender with whom you are borrowing. For example, in some states, you could apply for short-term loans from different lenders meaning that you may end up with more than one payday loan at a given time. Generally speaking, payday lenders will not approve a second payday loan if the first loan is still active.
Can You Get a Payday Loan From Two Different Places?
Rules for payday loans are governed by state law and thus vary between locations. In general, people are not allowed to take out payday loans from a different state. However, there are exceptions. For example, if you live in one US state, but are a permanent resident of another US state, you could still apply for payday loans in the state where payday loans are allowed; even if they are illegal in the other state.
However, it should be noted that if you have an existing payday loan, even if you are eligible it is unlikely that you will be approved for a second loan whilst the first loan is still unpaid. This is common among the majority of lenders.
Why Can I Not Take Out Multiple Payday Loans At Once?
Payday loans are restricted to one at a time in the majority of cases due to their extremely high interest rates (usually around 400-600%). Compared to other financial products such as credit cards, personal loans or credit unions, this is very high. This means that the more payday loans you take out at once, the harder it will be for you to repay when you receive money on payday.
If you are unable to repay the loan, it can be hugely detrimental for your long-term credit score, meaning that it will be even harder to take out loans or credit in the future. It even has the potential to impact contracts such as phone bills or being able to rent a property.
Should I Take Out Multiple Payday Loans?
Taking out simultaneous store or online payday loans is not usually an option, even if you have a good credit rating, as lenders are reluctant to lend money to people with unpaid debt. What some borrowers choose to do is take out consecutive payday loans; however, this is not advisable.
If you take out payday loans back to back, it could have a negative impact on your credit score. Not only that, but it increases the amount that you eventually will need to pay back. The more loans you take out, the more interest you continue to accrue; this can lead to a negative spiral of debt.
Borrowers who find themselves in need of payday loans month after month should consider other ways of managing their finances. These could include using a credit union, selling personal items or paying off existing debt. Payday loans should only ever be a short-term solution.
What Should I Do if I Cannot Repay My Payday Loan?
If you are unable to repay your first payday loan, the solution should not be taking out a second payday loan. All this does is allow borrowers to enter a dangerous cycle of debt, worsened by accruing interest rates.
Before looking to take out a second payday loan, you should first speak to your lender. Lenders may be able to help you create a new repayment plan or provide advice if you feel unable to repay your payday debts on the due date.
Other Alternatives To Taking Out a Second Payday Loan Include:
- Using savings
- Borrowing money from friends or family members
- Selling unwanted items
- Cutting back on monthly spending
- Checking local resources such as credit unions
- Taking on a side job
- Seeking payment extensions from service providers
Are There US States With No Limits on Payday Loans?
Currently for Colorado, loans in Texas and Nevada are states which offer unlimited payday loans meaning that a borrower can take out multiple payday loans at a time. However, this is highly inadvisable.
Payday loans are only meant to be used for short-term use and to cover emergency payments until your next payday. They work on a short-term basis with loan terms of between two to four weeks.
In states with no restrictions, borrowers are vulnerable to predatory lending with lenders taking advantage of borrowers by offering loans with impossibly high-interest rates and additional fees.
