How Many Loans Can You Have?

Consider Alternatives

Before you dive into another loan, consider the following options.

Work Out a Payment Arrangement

Your success at this will depend on the institution you need to pay, but many places will work out a payment plan or payment arrangement with you. For example, if you’re behind on your electricity bill, you can call the company to work out an extension. In some cases, you can do this directly on the company’s website.

Places like this might also have information on assistance programs that will help pay your bill during tough times. It’s never a waste of time to try to talk to your creditor as it can prevent the need for a loan in the first place.

Dip Into Your Savings

It might seem like a terrible idea to dip into savings, but sometimes, it’s the best option. It’s often easier and cheaper to rebuild your savings than to have to take out a loan and pay interest on it.

Cash Advance

If you have a credit card, you might be able to get a cash advance at a lower interest rate than a loan. It’s worth looking into before applying for a loan.

Debt Consolidation

This isn’t exactly an alternative, since it’s still a loan, but it is a better strategy in many cases. Let’s say that you already have a few loans and other debt. The payments you owe put you behind on your regular bills, leading you to need another loan.

Instead of getting a separate loan, consider getting one loan to consolidate all of that debt. In doing so, you can potentially qualify for lower interest and spread your payments out. Yes, you’re still getting a loan, but having one loan with better repayment terms can make it much more affordable.

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