Can I Have More Than One Payday Loan Open?

Yes, in the UK, it is possible to have more than one payday loan open at any time – and it is not uncommon to have 2 or 3 payday loans open at once. However, having too many payday loans open is not recommended because they are financial products that carry higher than average interest rates and falling behind on repayments can create a dangerous cycle of debt.

One payday lender will not usually give you a second or third loan, you may need to go to another lender if you would like an additional loan. This is quite common if you need to borrow £500, because you might get £300 from one lender and £200 from another. But it is important to know that using multiple payday loans and relying on these long-term loans is an expensive way to borrow and carries risks of getting into further debt.

Can I Get A New Payday Loan To Pay Off Another?

Whilst this is possible, this is not recommended. Using one form of expensive debt to pay off another is not a long-term solution and can often lead to debt problems. 

If you are struggling to pay off your payday loan, it is important to speak to the lender, a friend who you can trust or a debt professional such as StepChange or Citizens Advice Bureau.

Lenders Can See How Many Payday Loans You Have Open

When you apply for a payday loan, your application will usually undergo a credit check from one of the main credit reference agencies such as Experian or Equifax – and when lenders access this data, they can usually see a list of any loans that you have open and their repayment status.

Therefore, you will not be able to trick any lenders into giving you extra loans or saying that you have no loans open, because this information is very clear and available for them to see.

There are a number of horror stories about people who took out 8 or 9 payday loans at once, due to failings of the lenders and relaxed credit scoring. However, this often resulted in very heavy debt for the individual, major damage to their credit score and future borrowing prospects.

Can I Get Another Payday Loan From The Same Lender?

Usually no. A lender will not offer or give you another payday loan on top and you will never be in a situation where you have 2 or 3 loans open with the same lender.

If you need to obtain a larger amount, the lender could ask you to pay off the first loan in full to close the account. Then, based on credit checks and affordability checks, you could be eligible for a higher amount.

Can I Get An Extension On My Payday Loan?

Yes, each payday lender may have their own rules when giving you an extension, if you need a little longer to repay, such as an extra 10 or 20 days. This will usually result in paying extra interest because this accumulates each day. 

There are laws enforced by the FCA to limit the number of extensions and ‘rollovers’ of your loan that you can take out. This is to avoid customers holding onto the same loan for 6 or 12 months longer than necessary and paying significantly more interest as a result.

What Are The Risks Of Having More Than One Payday Loan Open?

Expensive – Very simply, payday loans are expensive. Carrying interest rates of around 1,000%, they are more expensive than credit cards, personal loans and borrowing from family and friends. 

By taking out more payday loans to help pay for something or to pay off a debt, you are probably paying a lot more to borrow money than you could do elsewhere. Hence, payday loans should be used for short-term purposes or emergencies, with the intention to repay and avoid using them again in the future.

Dependency – It is very easy to become dependent on the ease of payday loans and availability of quick funds. Payday lenders are just like any other business and will usually be happy to keep lending to you, but this could lead to dependency on the product long-term and this is not healthy for someone trying to get their finances in shape.

Spiral of Debt – When taking out too many payday loans and using one loan to pay off another, the fees can quickly start to add up – and for thousands of Britons each year, this leads to a spiral of debt and has resulted in bankruptcy for money. 

What Are The Alternatives?

If you feel that you need to borrow a little bit more on top of your existing payday loan, consider alternatives such as borrowing from family and friends which is pretty much always free and does not impact your credit score.

Some other affordable options include using 0% credit cards if you are purchasing something important or even selling old items around the house that you do not need, such as clothes, toys and furniture.