Can I Get a Loan If I Have One Open?

Home » Can I Get a Loan If I Have One Open?

Estimated reading time: 5 minutes

Yes, you can get a loan if you already have one open, as long as your income comfortably covers your existing repayments and you pass the lender’s affordability checks. Lenders look at how much disposable income you have left after paying your current loan, bills and everyday living costs.

Lenders must assess your full financial situation before approving any new borrowing, and they will only lend if repayments are affordable. MoneyHelper explains how lenders assess borrowing applications and why existing debts play a major role in approval decisions.

The Financial Conduct Authority also requires lenders to carry out strict affordability checks before approving any new credit, ensuring borrowers are not pushed into financial difficulty. Below, we break down how having one loan open affects your chances of being approved, which loan types matter most, and what to consider before applying again.

Does It Depend On The Type Of Loan You Already Have?

Yes, the type of loan you already have plays a major role in whether you can get another one.

With personal loans, it is generally possible to have more than one at the same time, provided your income supports the combined repayments. Many people manage two personal loans without issues, particularly if one is small or nearing the end of its term.

Type of existing loan	Can you usually get another loan?	Why it works this way
Personal loan	Yes, in many cases	You can often have more than one personal loan if your income supports the combined repayments and affordability checks are passed.
Payday loan	Usually no	Most payday lenders require the existing loan to be fully repaid before approving another, to prevent repeat short-term borrowing.
Logbook loan	Rarely	Your car is already being used as security, which limits the lender’s ability to approve further borrowing.
Secured loan or mortgage	Sometimes	Most people have one main mortgage, with a second charge loan only possible if affordability is strong and there is enough equity.

How Many Loans Am I Allowed To Have Open At The Same Time?

There is no legal limit on how many loans you can have open at one time, but lenders become cautious once you have more than one or two. Having one personal loan and a credit card is very common. Two personal loans can also be manageable, especially if your income is stable and expenses are controlled.

Problems arise when borrowers have several loans running simultaneously. Having three, four or five personal loans suggests financial strain, even if all repayments are being met. Lenders will see this when they run a credit check, and approval becomes less likely because your debt load appears higher risk.

Why Do Lenders Care How Many Loans You Already Have?

Lenders care how many loans you already have because each one reduces your available income and increases the chance of financial stress. The more of your income that goes towards repayments, the less buffer you have if your expenses rise or your income drops.

Multiple loans also increase your debt-to-income ratio, which is a key affordability measure. Even when payments are up to date, lenders see heavy reliance on borrowing as a warning sign that your finances may be stretched.

Should I Avoid Using One Loan To Pay Off Another?

Yes, you should generally avoid using one loan to pay off another because this can lead to a spiral of debt. Borrowing repeatedly to clear existing balances often results in higher overall borrowing, longer repayment periods and more interest paid.

While debt consolidation can be useful in some cases, repeatedly taking out new loans to cover old ones can quickly make your financial situation worse. This approach often masks the underlying problem instead of solving it, making long-term repayment harder.

How Does Having An Open Loan Affect Your Credit Score?

Having an open loan affects your credit score because it increases your total debt and reduces your available borrowing capacity. Even when repayments are made on time, open loans still count as financial commitments that lenders must factor into risk assessments.

Your score may fall slightly when you take out new credit, then gradually recover as you repay it responsibly. However, multiple open loans or frequent borrowing can hold your score down for longer and reduce your access to competitive interest rates.

What Should I Do Before Applying For Another Loan?

Before applying for another loan, you should review your income, expenses and current debt levels to ensure you can genuinely afford the additional repayments. Checking your credit report helps identify issues that could affect approval, such as missed payments or high utilisation.

It is also worth considering whether you really need another loan or whether there are alternatives such as budgeting changes, payment plans, or debt consolidation. Taking time to assess affordability reduces the risk of rejection and long-term financial strain.

You can often get a loan while another is still open, but approval depends on your income, affordability, credit history and the type of loan you already have. Personal loans are usually more flexible, while payday and logbook loans rarely allow overlapping borrowing. Managing debt carefully and avoiding repeat borrowing is key to protecting both your credit score and your financial stability.