How Many Short-Term Loans Can I Have?

Is taking multiple short term loans a wise idea?

Short-term loans are designed to bridge the gap between paydays when an issue arises that needs solving and you don’t have the financial means to do so. When you’re in a financial emergency with no savings and no friends or family who can help, a short-term loan can be a great solution.

It might be possible for you to borrow more than one short-term loan at a time but before doing so, you should ask yourself some important questions. Why do you need to take out another loan? Is there a lender who can give you the full amount you need to borrow instead of spreading it over two or more loans? Are you looking for credit for something that is urgent or are you being irresponsible with your money?

Ready to search for your loan?

Get Your Quote

Are you in a position where you won’t survive the month without borrowing from several lenders? It’s important to really assess if and why you need more than one short-loan because they can have knock-on negative effects if you do.

  1. You might find it more difficult to borrow money in the future. Taking on debt can be good for your credit if done responsibly, with on-schedule repayments being met and the final balance settled in full. However, when you apply for a loan, it doesn’t look good to the lender if you have too many hard searches from previous applications on your credit report, especially if they’ve been made in quick succession. Plus, any debt you already have might make lenders question your financial situation.
  2. How much you’re repaying to lenders each month will increase. Multiple short-term loans will lead to multiple monthly repayments. Lenders have checks in place to stop you from taking out loans that you can’t afford to repay. But life can be unpredictable and if your circumstances were to change, you’d suddenly be in a very difficult situation with lots of monthly repayments needing to be paid.
  3. It might be the wrong kind of financial support for you. Regularly taking out short-term loans to cover personal expenses and unnecessary outgoings could be a warning sign that you’re stuck in a cycle of debt.  There’s a chance that taking out more short-term loans will only dig you deeper into long-term debt which can be difficult to break free from.
  4. Over-borrowing can lead to an unbreakable cycle of borrowing. By borrowing more money than you really need, you are increasing the amount of money you need to pay out every month to clear the loan. As this amount increases, you might find yourself slipping into a cycle of becoming dependent on loans for capital, and using them to get from A to B each month, every month. This is a dangerous position to be in.

Your questions, answered

The ideal candidate for a short-term loan is someone who has a regular income but has found themself facing an unexpected, and often emergency expense they can’t afford to pay. Typical scenarios include emergency visits to and treatment from a vet, emergency dental work, car or van repairs following a crash or breakdown, and home improvements including replacing a boiler that’s beyond repair. As you can see, each of these scenarios is stressful and frustrating at the best of times. If you have no money available to resolve them, it can make the feeling of worry and distress a hundred times worse.

If you’re in a similar situation and have nowhere else to turn for financial help, you might be the right candidate for a short-term loan. Lenders insist that anyone applying for a loan also needs to be over 18 years old, a UK resident with a UK bank account, employed or self-employed and receiving a regular income. Some lenders have additional criteria specific to their terms so it’s always best to double-check what the lenders you’re considering require.

Lenders use credit scores to assess the creditworthiness of applicants, but this isn’t the only data they use to make a decision. They also run affordability assessments, and sometimes look at proof of residency and income. This means that whilst bad credit can reduce your chances of being approved for a short-term loan, it’s not the only factor lenders take into consideration and you might be approved when you apply.

You should also only apply for a short-term loan if you feel confident that you understand the lender’s terms and conditions, and you know what to do if your circumstances change, such as no longer being able to afford to meet the repayments. When you’re under pressure in an urgent situation, it can seem a good idea to skip through the T&Cs to save yourself some time. It’s also possible that your head is so full of worry, you struggle to take all the details in. You must take the time to thoroughly read through the agreement to ensure you fully understand what you’re signing up for, and what is expected of you as a borrower.

Get yourself in the best position to apply for a short-term loan by having all of your questions answered beforehand, so you can apply feeling confident and informed about the process. We’ve used our many years of experience here at The Money Shop to create in-depth, expert guides to boost your knowledge about short-term loans. We’ve taken the most common questions we’ve heard over the years and have compiled them, with answers, in guides that have been designed to educate and inform. Are short-term loans safe? Can I apply for a short-term loan with bad credit? Do short-term loans ever have a low APR? We answer all of these questions and more.

We also have an amazing team of financial industry experts ready and waiting to speak to you about your personal situation and financial worries. They can advise on the latest short-term loan news, alternative lending options, staying out of long-term debt, and more. They’ll listen to any question or concern you might have and will use their knowledge and experience to tailor assistance that suits you.

Online short-term loans have revolutionised how we borrow and repay money.  Now, applications can be made in minutes from the comfort of your home and you’ll usually receive a decision in an instant. Once loans are approved, the money can be in your bank account within hours of the very same day. It’s a quick, hassle-free process that is perfectly-suited to anyone who needs emergency cash fast.

If you’ve decided that a short-term loan is affordable and the right solution for your short-term need for money, it’s time to get started. Compare the best lenders to see who has the lowest APR and interest rate. Once you’ve chosen your lender, double-check that you meet their lending criteria, as we’ve mentioned above.

The next stage is really quick and easy. Fill in the application form with information about how much money you’d like to borrow, potentially what the money will be used for and how long you’d like to borrow it. The whole point of short-term loans is to have them re-paid quickly over a short length of time; most short-term loans last between 3 to 6 months.

The form will also have fields for information about who you are, where you work and your regular income. You may need to provide proof of your income and where you’ve lived for the past 3 years. Some lenders also ask for information and estimates for your monthly outgoings, for things like your mortgage or rent, utility bills, regular outgoings, transport and other common expenses. 

Now it’s over to the lender to run their internal checks, including a search on your credit file and affordability assessments in order to check your creditworthiness. If you’re approved for the loan, your lender will send the funds straight over into your bank account. This part of the process is usually just as speedy as the rest – most lenders deposit the funds into your bank account within hours of approving the loan.

Once you have the loan and have resolved the emergency you’re facing, make sure you are diligent with your loan repayments and settling the balance. If you are tempted to take out multiple short-term loans, ask yourself why, speak to a friend or family member, or reach out to our team here at The Money Shop to discuss your situation. You can even refer back to this article to remind yourself of the potentially negative consequences of taking out more than one short-term loan. At the end of the day, you should only be taking out a short-term loan that you desperately need and can definitely afford to repay.