If you currently have a payday loan that you owe on, it might be hard for you to get a second one at this time. It really depends on the state you live in, because each state has different rules, but it may depend on other factors too. Your best bet is to repay your loan before applying for another one; however, there might be a chance you could still get one. Here are three important things to understand about the number of payday loans you can have at one time.
Each State Has Rules
Most states currently have rules relating to payday loans, and these rules are in place primarily to protect consumers from the high interest rates of these loans. These rules often include details about:
- The maximum interest rate companies can charge for payday loans
- The number of payday loans people can get
- The maximum amount of money people can borrow
- The length of the loans
Before you can find out whether or not you can get a second cash advance loan, you may need to find out what the rules are in your state. Some states have banned payday loans altogether; however, there are similar alternative types of loans available in many of these states.
One Way to Get a Second Loan
It is quite common for states to limit payday loans to one per person, but this typically means that a person can only take one payday loan from a particular lender at one time. In other words, if you have a loan with ABC Payday Lending, you might not be able to get a second loan there, but you could go to XYZ Payday Lending and get a loan there.
While most states will allow you to have more than one loan, as long as they are with different lenders, many states will only legally allow a person to have two payday loans in all.
For example, in Michigan, all payday lenders must use an electronic database to look up a person before approving a loan. This typically requires entering a person's name, birthdate, address, and social security number. This database will show whether the person has any current payday loans, or if the person does not. If the person already has two outstanding loans, the lender would have to decline giving him or her the loan.
There Are Alternatives
If you live in a state that prohibits having more than one payday loan at a time, there might be other ways to get the money you need. For example, you could ask a friend for a loan and promise to repay the money with interest. If this is not an option, you could look into a car title loan.
Car title loans are similar to payday loans, except that you must give them collateral to get the money. As soon as you repay the loan in full, you will receive the title to your car back from the lender.
Another option to consider is selling something to a pawn shop. This would not be considered a loan, yet it would be a quick way to get the cash you need.
There are rules relating to payday loans, and these are for your benefit. Getting a payday loan is a great way to get cash when you need it, but it may not always be an option. If you would like to learn more about the options you have, contact a payday lender in your area today. They will likely already understand the rules and would be able to help you with your financial situation.