How many payday loans can I get? This question often comes to mind when a loan becomes due and you have no money to pay off the first loan. Payday loans are often really hard to pay off since they charge up to 60% interest. Most people end up taking out another loan when the pay date comes.
The unfortunate thing is you can take as many payday loans as you want if the lending company allows you. There are lending companies who actually take advantage of a person’s desire to take out multiple payday loans, since the loans accumulate and so do the interest. The larger the loan, the larger the interest you need to pay. Usually, lending companies often forbid you to take out additional payday loans if it becomes clear that you will have trouble paying off these loans.
Currently, there are no limits to payday loans. However, lawmakers are now attempting to pass bills to limit the number of payday loans that lending companies can give out to curb the abuse that most lending companies do when they allow clients to take out multiple loans while allowing the interest to pile up at the same time.
Should You Take Out Multiple Payday Loans?
It makes very bad business sense to take out multiple payday loans since you end up paying more in interest compared to the amount you were able to use. The advisable thing to do would be to take just one payday loan and not take additional loans until this first loan is paid off. This is because once the loan is paid off, you no longer have to pay any interest since you no longer have a loan to pay.
Alternatives to Taking out Another Payday Loan
Since it is not advisable to take out multiple payday loans, what you can do is get the money to pay off the first loan from someone who will not charge you interest. This could be anyone from a relative or a friend who is willing to give you the money you can use to pay off the loan. This way, you eliminate the debt with the corresponding interest, and replace that with a debt that will not cost you any interests. You can take a temporary job so that you can have a separate income that you can use to pay off the debt. If you are in the process of paying off a loan, you will need to limit your spending until the loan is paid off.
Payday loans have no limits so clients can take out as many loans as they want. However, this practice is risky and very dangerous since it can become hard to repay the loans once they start piling up. Payday loans are also not the ideal type of loan to take since they have higher interest rates compared to other types of loans. To avoid falling into the trap of multiple loans you need to commit to taking out one loan at time so that you will not find yourself buried in debt down the road.