Taking multiple loans: How many personal loans can you have at once?

Taking multiple loans: How many personal loans can you have at once?


Confused and stressed over multiple loans and unsure how many personal loans you can have at once
Confused and stressed over multiple loans and unsure how many personal loans you can have at once

We might occasionally incur multiple unplanned expenses or encounter a few cash flow problems that might lead us to take on multiple loans. For example, taking a payday loan after taking a medical loan.

What are the risks involved and how many personal loans can we actually take at once?

Read on to find out more.

How many personal loans can you have at once?

Personal loans can come in handy if you are struggling with unexpected expenses, such as sudden medical costs, funerals and more.

While you might require various loans, many money lenders actually do not do a second loan. Thus, you will likely have to take out loans from different money lenders.

Here’s how much you can borrow up to:

However, unsecured loans are capped at $3,000 for Singaporeans and Permanent Residents with an annual income below $20,000. If your annual income is above $20,000, you can take up a loan up to six times your income.

When taking an unsecured loan from the bank, if your annual income is above $120,000, you can borrow up to 10 times your monthly income. However, if you owe more than 12 times of your monthly income in unsecured credit for more than three consecutive months, you will be unable to apply for further credit.

Risks of taking multiple personal loans

There are various risks of taking multiple loans and these are something we should consider:

1. You might chalk up late Interests and fees

If you don’t repay your loan on time, you can end up chalking up hefty fees and interests.

According to money lenders’ regulations under the Ministry of Law, the maximum rate of late interest that a licensed money lender can charge for late repayment of a loan is 4% for each month the loan is repaid late.

Furthermore, money lenders can also impose a fee that totals up to $60 per month for each month of late repayment. These fees and interests will inevitably add up, and you might end up sinking into even greater debt.

2. It might affect your credit history

If you are taking out a bank loan and fail to repay on time, your credit score might be affected.

A credit score is a number used by lenders as an indicator of how likely borrowers might repay their debt or default on their loan. This scoring system is also used by banks as an assessment, and a low credit score might prevent you from being able to get important loans in the future.

3. Emotional stress

Managing one loan is already a stressful affair and this might be made even more arduous when there are multiple repayment deadlines to handle. This can take a toll on your mental and emotional health.

Tips for borrowers with multiple loans

1. Get help from social service agencies

If you are stuck with multiple loans and are already struggling to repay everything, taking a loan to cover another loan is likely to make matters worse.

In this case, you might want to consider seeking help from social service agencies, such as government financial assistance or credit counseling help. Check out the list of social service agencies you can seek help from here (under point 11).

However, do note that doing so might affect your loan approval in future even if you have already cleared your debts.

2. Take a debt consolidation loan

It is generally not recommended to take multiple loans unless absolutely necessary.

If you have multiple loans to manage, are still able to repay them, but are struggling with juggling the different repayment dates, you can consider taking a debt consolidation loan. It is a debt refinancing option, in which you can consolidate all loans into a single one managed by a single financial institution.

This will help reduce your risks of late repayment, and taking this will not affect your ability to take up more loans in future.

Managing multiple loans?

At Prosper Credit, we offer debt consolidation loans that can help you better manage your existing multiple loans. Let us know what you need, and we will cater our loan accordingly.

Reach out to us now.



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