Guide to Getting Second Personal Loans

Posted by Frank Gogol

Disclosure: Stilt is a lending company. Nonetheless, we are committed to recommending the best loan products to our readers when their needs are outside Stilt’s loan offerings.

Credit is an amazing tool. It can help finance a project or purchase you would never be able to do yourself. You can get a personal loan to gain more finances when you have run out of money. A loan is a nice way to gain the benefits of having more cash know whilst you settle the debt and interest over time.

But what do you do if you already have a personal loan and need more money for something else? Is it possible to get a second personal loan? Do lenders allow it? If so which lenders can you consider for a second loan? Here are some answers to your questions. It’s much simpler than what you’d think.

Can I Take Out a Second Personal Loan if I Already Have One?

The short answer is, yes. You can most certainly take out a second personal loan but there are a few conditions that need to be met before it becomes reality.

You still need to qualify for the second personal loan before a lender will disburse it into your bank account. All the same eligibility criteria still apply. The lenders will check your credit score, they need to verify your income and they would like to confirm your employment. They may also need to confirm your immigration status by checking and confirming your visas or residency status.

A second personal loan is a viable option if you can qualify. Most importantly, it’s a good idea if your debt-to-income ratio can withhold another loan. Your income must be more than the debt payments you have to service. This is one of the key ways in which lenders stop people from becoming over-indebted.

Be Careful of Overborrowing

A second personal loan sounds like a great idea. But is it really worth it when you consider the monthly installments? You already have a personal loan and you’re already locked in on monthly installments. A second loan could push you into a negative cash flow situation if you don’t manage it correctly.

Reconsider the project or purchase you want to finance with your second personal loan. It’s of no worth getting over-indebted for something you don’t really need. On the other hand, find cheaper alternatives if you do need the thing you want the loan for. Overborrowing is no joke because it will hurt your finances. It won’t stop there, your credit score will also take a dive if you start missing loan installments. This will hamper your application efforts for future credit.

That being said, let’s assume you have checked your finances and you can take a second personal loan. Where do you start your search for lenders? Who would consider a borrower asking for their second loan? Here are a few lenders for your consideration.

Best Lender for Second Personal Loan

Use this table to find the best lender for your situation. They are compared side by side to give you a better perspective of their value propositions. They are as follows.

Lender Best Can You Get a Second Personal Loan? How to Qualify Visit
Stilt Second Personal Loans for Visa Holders Yes Make it through half of your loan term with on-time payments and apply again. Visit
Lending Club Second Personal Loans Yes You’ll be invited to apply for a second loan or else you must apply and comply with various eligibility factors. Visit
Laurel Road Second Personal Loans Yes Your current loan must be active and in good standing. The underwriter will also check your eligibility. Visit
Prosper Second Personal Loans Yes Minimum credit score of 640 and no late payments in the past 3 years. Visit
Upstart Second Personal Loans Yes A current loan balance of no more than $50,000 and on-time payments for the past 6 months. Visit

Considerations to Make Before Taking a Second Loan

As mentioned earlier you must be absolutely sure about a second personal loan before you commit to such a responsibility. Here are two concepts you must understand which can help you decide whether a second loan is a good idea.

The Cycle of Debt

Believe it or not, but debt runs in a type of cycle. Borrowers are cash strapped so they apply for loans and in so doing set their own debt cycle in motion.

A simplified debt cycle works as follows:

  • Borrowers need money
  • They get credit
  • Credit demands payments
  • Over time borrowers run out of money (only when their income is less than their expenses)
  • They need money, take out more loans, and the cycle repeats itself.

There’s nothing wrong with taking out loans. It’s about whether you can escape the debt cycle by settling your debts before you fall into more financial need. Remember a second loan also demands interest and installments. And your monthly debt repayments will increase, especially if you haven’t yet settled your first personal loan.

Check your debt-to-income ratio and make sure you’ll have enough of your monthly income remaining after you’ve had to settle your debts. You must have enough to cover your housing and living expenses or else a second loan may be a bad idea.

Impact on Credit Score

People who can’t escape the debt cycle inevitably end up over-indebted. They need more money and take more loans to cover the gap in their finances. In the short term, this may seem like a sensible idea but down the line when their money depletes they are again faced with a shortage of cash. This shortage causes them to miss payments and missed payments have a negative impact on their credit score.

The businesses they owe money to report their payments to the credit bureaus. Any missed payments are also reported to those bureaus. Miss too many payments and they’ll damage their credit score quite badly. This again has a bad effect on their debt cycle, because if they apply for any consolidation loans they’ll get really bad interest rates compared to what they would have gotten if their credit scores where better (had they not missed any payments).

Does It Make Sense for Me to Have More than One Personal Loan?

Well, it depends on whether you really need the thing you want to purchase or finance with your borrowed money. The only way it would make sense to get a second personal loan is if it places you in a position which grants you better opportunities to escape your debt cycle.

Let’s say for instance you need a reliable mode of transport to get you to work, or you want to capitalize on an opportunity that helps you grow your ability to earn more income. Then it would make sense to get a second loan. And it would also make more sense if you got the best and cheapest loan available. Shop around to find the loan that offers you the best service as well as the lowest interest rate.

How to Get a Second Personal Loan with Stilt

You could get a second personal loan with Stilt. Complete on-time payments for at least half of your current loan term and apply. Even an international could apply for an immigrant personal loan. Make sure you comply with the simple eligibility criteria and apply online. It’s that easy.

Personal Loans
 for Non-U.S. Citizens!

Check Loan Options

Loans for up to $35,000. No cosigner required. No prepayment penalty.

Final Thoughts

Personal loans are wonderful financial tools. It helps you finance all kinds of projects and purchases. But you must be sure about a second personal loan before you take up such a responsibility. Can you settle your credit obligations and escape your debt cycle if you take a second loan? If so, you can consider a second personal loan.

Are you still looking for a second personal loan? You could be eligible for one. Read through the tips and the eligibility criteria supplied above and apply today.

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