Will I be approved for a loan if I have outstanding loans?
Having outstanding loans is not in itself an obstacle to taking out a new loan. However, each additional loan increases your debt burden, so the lender must make sure that you will be able to meet your obligations on time.
Assessing a borrower’s creditworthiness is also a legal requirement for a financial institution, established by Article 10 of Law No. 1734-VIII.
If you have several loans at the same time, the lender will take into account how much you are already paying, your income, and whether you have had overdue payments. The final decision depends on the results of the creditworthiness assessment and the policy of the specific financial company.
How many loans can you have at the same time?
The law does not set any limits. At the same time, each new loan increases the amount of your financial obligations, so MFIs take existing loans into account when assessing creditworthiness.
The permissible number of loans depends on the policy of the specific financial company. In practice, 1–2 active loans are usually not considered a critical level of debt burden, while 3 or more may be a risk signal for the lender.
How existing loans affect an MFI’s decision
When a person applies for a loan, the lender gains access to their credit history. By law, financial institutions may check information about a borrower’s current and previous obligations (Article 6 of Law No. 2704-IV).
What matters to the lender is not so much whether you have other loans, but your overall financial situation:
- Income level
- Amount of current obligations
- Amount of monthly payments
- Overdue payments.
In general, the more loans a person has, the higher the risk of rejection because the total debt burden increases.
How to improve your chances if you already have loans
To increase your chances of getting a loan when you already have other loans, try to improve your financial profile:
- Reduce your current debt if possible. This will reduce the number of active obligations and your current payments.
- Apply for a smaller amount. The less money you borrow, the lower the risk for the lender. If you repay on time, your limit may be reviewed.
- Do not submit several applications at the same time. A large number of simultaneous requests may negatively affect the creditworthiness assessment.
- Confirm your income via BankID. The more verified information the lender has about you, the better your chances of a positive decision.
FAQ
Can I have two loans from the same MFI?
As a rule, it is not possible to have two loans from the same MFI at the same time. A new loan is issued only after the previous one has been repaid in full.
Do repaid loans affect my chances of getting a new loan?
Yes. Repaying a loan supports your creditworthiness. At the same time, the lender also assesses how you fulfilled your previous obligations.
Can I get a loan if I currently have overdue debt?
Many MFIs provide funds even when there are overdue payments because they assess creditworthiness comprehensively.
Final summary
Having several loans at the same time is not prohibited; the key factor is the borrower’s ability to service the new debt.
When applying for a loan, use only licensed MFIs. This helps ensure that your rights as a borrower are protected.
Disclaimer: The information in this article is for informational purposes only and does not constitute financial or legal advice.
Sources
- Law of Ukraine No. 1734-VIII “On Consumer Lending”
- Law of Ukraine No. 2704-IV “On the Organization of Formation and Circulation of Credit Histories”
- Law of Ukraine No. 361-IX “On Prevention and Counteraction to Legalization (Laundering) of Proceeds of Crime, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction”