In your life, various unforeseen circumstances happen that may force you to take another borrowing. You can take a loan in the same organization where you did it for the first time if it is provided for by the rules. Or apply to another lender.
In extreme cases, there is always the opportunity to use a special debit application, which is much more convenient and faster. Below you can find information about additional credits, find out what the consequences may be and what is the best thing to do if you urgently need money.
Is It Legal to Have More than One Payday Loan?
You are not alone if you are wondering “how and where can I get a payday loan if I already have one”. Yes, you can usually get another payday loan.
The law does not prohibit lenders from issuing multiple payday loans. However, it will most likely not be the same lender, and the conditions will be even worse than your original loan.
Because the more credits you get, the higher the interest rate on them. And the more likely you will fall into the circle of payday loans: this is when you take and take loans to close the previous ones, thus forming a closing chain.
Payday lending is illegal in 15 states and the District of Columbia, but is legal in the other 35 states. In states like Texas, there are no limits on loans.
Let’s say you already have a loan of $500. The same lender or any other lender can give you another one of $500 in advance.
Will a Lender Give Me Another Loan?
Before you get any loan, you need to give permission to the lender to check your creditworthiness. At the same time, credit bureaus such as Experian, TransUnion, and Equifax report how many loans you have. They also know how much debt you have. And decide whether you can repay it or not.
If the lender sees that you already have a loan, your chances of getting another loan are 50/50. If they see that you already have two loans, the chances that he will give you another one are even less.
But if you have five payday loans, they are much less likely to give you a sixth. So, the more payday loans you have, the less likely you are to get another one.
What Should You Consider Before Taking Out Another Loan
Before taking another loan, you should think about the terms of that. Lenders have all your data: credit history and rating, the presence of outstanding loans. They know what types and conditions of loans you had and other subtleties.
If you already have outstanding credits, you may be considered a risky and desperate borrower. You are more likely to be charged higher interest rates and fees. If you’re looking for a second payday loan because you think the first one is bad, don’t expect things to get better.
You must assume that each additional loan you receive will have worse terms than the previous one.
Deteriorating Conditions
One of the deteriorating conditions is getting into the debt cycle. This concept constantly means the habit of taking additional personal loans. This can lead to catastrophic circumstances.
If you frequently take out new personal loans and make the most of your credit cards, it might be time to check your finances.
The second worsening condition is the downgrading of the credit rating. Inquiries on your credit report usually result in a slight drop in your credit score.
This fall may not appear immediately. But it will appear as soon as you approve new credit. And so on, increasing with each new cash loan.
The third consequence is the unhealthy practice of creditors in collecting debts. Sometimes their methods are cruel. And although the Financial Conduct Authority (FCA) exercises close supervision over this industry, its reputation is still damaged by this practice.
Ability to Repay
If you give the lender access to your bank account as part of the credit agreement, then he will immediately withdraw the money from it when the payday arrives. If the debt does not go through, the amount can be broken down into smaller pieces to extract all the money in your account.
Each unsuccessful attempt may result in you being charged a bank fee.
Successful attempts may empty your bank account and cause other transactions to fail, which will also result in fees being charged. At the same time, lenders will start calling, sending letters from lawyers, and contacting relatives or friends you used as references when you took out credit.
However, non-payment of the loan is not a criminal offence.
The Best Apps For Getting Cash
To facilitate the procedure for taking a payday loan, special applications were invented. They speed up and smooth the borrowing procedure, bringing it to a few clicks on the screen of your smartphone.
You no longer need to go to special banking institutions and fill out a lot of paperwork. We have identified three of the most popular applications that differ in their effectiveness from others. Let’s take a look at a brief summary of each of them.
Earnin
Earnin is a popular app that helps users earn faster income from their work. You can apply for a small loan online. The platform keeps track of your hours worked through your schedule or by tracking your location.
The loan amount varies from $50 to $100. Earnin does not charge any interest or commissions but does have a tip. They can range from $0 to $14 and are deducted by Earnin from your payday, along with the money you borrowed.
In addition, you can sign up for the fast loan delivery feature, which costs between $1.99 and $3.99, depending on the amount of money you need in advance.
The application also has a Balance Shield Alert feature that notifies you of overspending. Earnin also offers help to track medical bill reconciliations and find payment plans with Health Aid.
Dave
This app is for those who require a small loan until their next paycheck or want to buy something urgently. With Dave, you will not only receive money but also learn how to manage your finances, control your expenses and learn about other types of loans.
Dave’s monthly subscription is only $1 per month, giving him an edge over other platforms. For this payment, you can receive $250 in advance with no interest or administration fees.
With free use, you get to take just $100 and get it in a couple of days. The app takes fees from $1.99 to $5.99, so you can get paid faster. The fee varies depending on the amount of the loan.
The app also has a “Side Hustle” feature that helps users find additional part-time jobs. And to receive $500 in advance, you must become a member of the new ExtraCash program.
Brigit
Brigit is another app that allows you to borrow money. The amount varies from 50 to 250 dollars. Brigit connects to the consumer’s checking account through an online application and tracks spending.
The application also has a function for various financial advice and assistance in budgeting for the month. When a person has an overdraft, special notifications will come.
The $9.99 membership fee per subscription gives you access to the Plus program that you’re becoming a member of. If you’re having trouble getting your deposit back, Brigit allows you to extend the repayment period to avoid over drafting your account.
And with the help of the application, you will learn not only to save but also to distribute the costs of your advance purchases properly.
How Can I Make Sure I Get Approved For A Second Short-Term Loan?
It is possible to take out two credits from different locations if you meet the eligibility requirements, mainly credit score and debt-to-income ratio. Lenders will carefully review your previous loans. They will only approve your application if they are satisfied that you can afford to repay the new debt.
There is a 5 C credit system. This is a system used by lenders to assess the creditworthiness of potential borrowers. It consists of
- character,
- capacity,
- capital,
- collateral,
- and conditions.
The first letter C refers to credit history, which is the borrower’s reputation or track record for paying off debts. Capacity measures a borrower’s ability to repay a loan by comparing income to recurring debts and assessing the debt-to-income ratio.
The next indicator is capital. A large borrower’s contribution reduces the likelihood of default. The presence of collateral gives the lender confidence that if the borrower defaults on the loan, he can get something back in the form of collateral.
In addition, lenders look at the general terms and conditions regarding borrowing. This may include the length of time the candidate has been in their current job, how their industry is performing, and future job stability.
Alternatives to Additional Loans
There are situations when you do not need to take out a second loan. Let’s say you understand that you can get into a debt cycle or have no idea how to close two borrowings in the future. Or you can borrow interest-free debt from your friends or family.
If you only need a couple of hundred dollars, then it is better not to take credit. Better try other ways to get or earn money, which we have described below. Perhaps some of them will inspire you.
Use Savings
The simplest and most popular way is to use savings. Train yourself to put aside at least 10% of your paycheck each month. Review your spending: perhaps a pack of cigarettes or another cup of coffee is not as important as the possibility of not taking credit or debt in the future.
Involve your family in this process. If it is very difficult to accustom yourself to saving money, then download a special application on your smartphone or tablet. It will help you learn how to manage your finances in advance and always remind you to set aside a certain amount for future expenses.
Sell Unnecessary Items
Selling unnecessary items is not only good for your finances, but also for the environment. The problems of global warming are only getting worse and more tangible every year. Everything is interconnected: more demand affects the amount of supply.
More factories make goods and harm the environment. Therefore, you can sell strange, unnecessary things, make another person happy, save nature and earn some money. It’s even nicer than taking on debt.
So see if you have clothes or furniture that you no longer need. Luckily, there are plenty of websites and apps to help you sell.
Cut Back on Expenses
Start tracking your shopping habits. Perhaps you really spend money on unnecessary things but do not notice it. Get an application or a notebook where you will mark all your expenses for the day, week, month, and year.
Review your monthly subscriptions. Most people subscribe to cable TV or streaming services, the Internet, cell phones, publications, weight loss programs and forget to use them. Some of them you obviously do not need, and you can save money by unsubscribing.
You can also cut your electricity bill. Don’t leave your computer running, don’t run the dishwasher before it’s fully loaded, hang laundry instead of turning on the dryer, change energy-saving light bulbs, and turn off the thermostat.
Seek Free Debt Counseling
This is one of the most popular solutions for paying off debt or when there are no other options than a loan. Contact a specialist for advice and assistance. You can also turn to credit coaching.
This is a free service provided through credit.org that provides you with the advice you require on debit and credit. A credit coach can help you negotiate with your creditors and consolidate your loans.
Get Extensions on Your Payments
Many lenders offer short-term deferral plans if you are unable to pay off your personal loan due to financial difficulties. You will be offered to extend the term of the loan in exchange for a break in the regular monthly payment.
Suspending your payments is not free if your lender charges interest on deferred payments.
Some lenders offer interest-free personal loan deferrals, meaning no interest will accrue when you put your payments on hold. Other lenders continue to charge interest during this time.
Get a Part-Time Job
It is not necessary to look for a second job in order not to take a loan. You can get a part-time job. For example, teaching foreign languages on the Internet or working as a nanny for a neighbor’s child, or walking dogs for money.
You can start a YouTube channel to become a blogger. Turn on the possible display of advertisements during your videos, and you will be able to receive some amount of money in your account.
All these options can be done after your main job and earn up to $500 per month. After all, this is how much money platforms usually offer on payday loans.
Conclusion
Summing up, we want to note again that you can take a second, third, and even fifth loan, but this will have consequences for you. Not only in the form of high-interest rates but also a chance to get into a debt cycle. Even using apps that teach you how to manage your profits and finances.
Asking yourself the question “where can I get a payday loan if I already have one” do not forget that there are always alternatives to lending. Of course, selling old things and saving on electricity will not bring quick results, but at least it is less risky.
And a part-time job generally helps to make new acquaintances and diversify your life. If you think that a loan cannot be avoided, then always read the rules carefully and do not be afraid to seek professional advice in advance.
