How many payday loans can you have?

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The amount of payday loans you’re allowed to have varies by state. Every state has their own laws and regulations governing payday lending.  

While many states have no limits on how many payday loans (types of bad credit loans) a person can have, some do. For example, Washington has a state law that limits the number of payday loans a person may have to eight. But not all states have a law like this, meaning borrowers may continue to apply for additional payday loans whenever they want. 

While borrowers in some states are allowed to borrow multiple payday loans if they wish, this may not be the smartest financial decision. Having more than one payday loan means keeping up with numerous balances and being charged interest several times over. The financial drain of having multiple payday loans often causes borrowers to accumulate more debt than they started with, defeating the purpose of taking out a loan in the first place. In fact, the average payday loan customer who borrows $400 for a loan to help them get by until their next paycheck winds up paying back $950 over 11 loan cycles in a year.¹

Having multiple payday loan balances also puts borrowers at risk of missing a payment or falling into loan default. Loan default is when a borrower neglects to make payments on their loan, forcing lenders to send the delinquent account to a collections agency. Defaulting on a loan can also cause your credit score to drop quite a bit, making it harder to find an approval for loan products in the future. Unfortunately, loan default and delinquency can stay on your credit report for seven years or more. 

But what should you do if you currently have a payday loan but need more money? Instead of applying for another payday loan, consider consolidating your debt with a better funding option. Consolidating your debt by refinancing can help you get a better loan deal and may even help you improve your credit score. 

Refinancing with a debt consolidation loan allows you to take several loan balances and combine them into one manageable monthly installment. That way, you don’t have to worry about keeping track of multiple payments and can save money by consolidating your interest charges. Loan refinancing can also come with other perks like better interest rates, extended loan terms, and additional funding! 

Check out more information on debt consolidation loans and access other free financial resources on the CreditNinja blog page!


  1. Debt Trap | Coalition on Human Needs

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