Can you take out a second payday loan?

Elizabeth Barry 7 December 2015

apply for a second payday loan

What you need to know about applying for a second, or even third, payday loan...

Short term loans, commonly referred to as payday loans, can be a convenient option when you're strapped for cash before your next pay. If you already have a payday loan and you need another one, there are a few things you need to know before you can apply.

Is it possible to take out multiple payday loans?

The short answer is yes, but the longer answer is that you'll need to meet more stringent criteria than when you applied for your first one. This is not because lenders apply different criteria to second loans; this is an ASIC requirement of a responsible lender. As you're already repaying a Small Amount Credit Contract (SACC), the lender will need to take further steps to ensure you will be able to manage the additional repayments.

What are the ASIC requirements for multiple payday loans?

ASIC has many requirements in the payday lending space to protect you, the borrower. Payday lenders have to take further steps to ensure you won't be under substantial hardship when making repayments if any of the following situations apply:

  • You are currently repaying another payday loan
  • You are in default of payments under any payday loan
  • You've had two or more payday loans in the 90 days prior to applying
  • You plan to use this payday loan to repay another payday loan

What will lenders look at when I apply for a second payday loan?

To comply with ASIC regulations, lenders need to ensure you will be able to repay the loan without substantial hardship. To do this, they will review your current financial situation and look at multiple factors, including your credit history, what payments you make on your current payday loan and any other loans, whether you receive Centrelink payments, how you are employed and your income. This may mean that you are no longer eligible for a loan you were previously eligible for.

How can I make sure I'm approved for a second payday loan?

There's no way to make sure you are approved, and being approved for a second loan will probably be harder than it was when you were approved for the first loan. It's important to keep the following in mind:

  • Before applying, re-examine the eligibility criteria of the lender. You may or may not be eligible for loans you were once eligible for. Some lenders may specify that you cannot currently be repaying a payday loan or using the loan to repay a payday loan, so check this to avoid a rejected application.
  • Check your own budget before applying. Can you afford the repayments of the loan you are applying for? If you think you will struggle to make multiple loan repayments, then you may want to consider alternative financing options, such as community financial assistance programs, or reconsider if you need the loan at all. Payday loans are not a long-term financial solution and are only meant to serve an immediate need for funds.

Compare your options before applying and always examine the eligibility criteria carefully. There's a range of payday loans available, so you have a better chance than ever before of finding the right loan for you.

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4 Responses

  1. Default Gravatar
    lannetteAugust 10, 2017

    I currently owe ace cash exspess friday for a loan but two days ago i was approved by inbox loan. Is that going to affect me getting another one from ace?

    • Staff
      JonathanAugust 10, 2017Staff

      Hello Lannette,

      Thank you for your inquiry.

      Your recently approved loan will be considered on your second loan application with Ace. :). Please be advised that this is only in compliance with ASIC regulations to ensure you have enough capacity to meet your existing obligations.

      Please read the fine print of your services to make sure it benefits your financial goals in the long-term and don’t hesitate to contact your lender should you have additional questions.

      Hope this helps.

      Cheers,
      Jonathan

  2. Default Gravatar
    SeanOctober 8, 2016

    Can I get a payday same day loan and I already have two loans out

    • Staff
      AnndyOctober 10, 2016Staff

      Hi Sean,

      Thanks for your question.

      Generally, it is possible to have multiple payday loans under one lender. However, you’ll need to meet more stringent criteria for approval than when you applied for your first loan. You can directly get in touch with your lender and request a copy of the requirements.

      Cheers,
      Anndy

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