You can only receive one Upstart loan at a time. However, borrowers who had previously received a loan can apply for second-time funding if they meet the following requirements:
- Monthly loan repayment for the past six consecutive months must have been made on time or within the 15-day grace period. Borrowers in this category who have fully repaid their first loan can make an application 14 days after their most recent payment.
- No unsettled due payment. If you meet this condition, but the monthly repayments were not on time, there is a 60-day window before you can reapply.
- Not more than one pending Upstart loan during the second application.
- Less than $50,000 outstanding loan principal.
If you have an existing loan, Upstart will not grant your second loan application until your pending payment is settled. When making a new loan application, it is advisable to use a different email address from your first loan request.
Drawbacks of Getting a Second Loan
A second loan could help you wriggle out of peculiar financial circumstances, but it has several potential drawbacks. Here are some disadvantages to consider.
Poor Credit Score
Multiple loans could worsen your credit score. As you make several loan requests, lenders pull your credit each time, thereby affecting your credit history. Also, failing to make repayments on time will also cause a drop in your rating.
Risk of Falling into an Unending Debt Cycle
Continuously taking loans in addition to existing outstanding payments could draw you into a debt cycle. Many borrowers make the mistake of receiving more funding than they need. In turn, they take on new loans to repay outstanding debts and continue this cycle for a long time.
Increased Debt to Income Ratio
The debt-to-income ratio or DTI represents the fraction of your monthly income that is directed towards settling debts. Without a doubt, taking a second loan increases this ratio. And many lenders may reject your application for funding in the future if you have a high DTI.