Can You Have Two Car Loans At Once?

can you have two car loans at once

When purchasing a car, the process, although somewhat daunting, is, for the most part, fairly simple. That is, as long as you have decent credit. First, you find a vehicle that suits you and your monthly budget. Then, after settling on a price and putting some money down and/or trading in another vehicle, you’ll sign off on a loan (likely, at the dealer’s) and drive your new-to-you car right off the lot.  But, what if you’re buying two cars at once or buying another before your other vehicle loan is paid off? Can you have two car loans at once?

Can you have two car loans at once?

You may find yourself in a situation, particularly with your husband or wife, where you may need to have two car loans out at the same time. Whatever the circumstance, the answer is typical of most finance questions: it depends.

As with any loan, what will determine your approval comes down to a number of factors; mainly, your credit. Let’s break them down.

Getting Approved for Two Car Loans

There are a few key factors that will be considered for multiple loans. They are as follows:

Credit History: Not surprisingly, one of the first things a banker or lender will look at will be your credit history. A credit report will be obtained and reviewed, which will include your credit score, repayment history, other loans on file, and so on.

This will be one of the main elements in determining your approval for another car loan. Even though you were approved for one does not mean this second will come just as smoothly.

Proof of Income: In addition to credit history, those loaning you the money will want to see a proof of income — for obvious reasons. This shows them not only that you have money coming in regularly but provides an idea of how capable you are of repaying such debt.

Other Factors: Other factors that may be considered for another car loan may also include your debt to income ratio. If your debt ratio is 50% or more, you may have trouble getting approved for a loan even if you have a decent salary. Writer and real estate investor Michael Bluejay notes on his website that each bank differs, but in generous cases, your bank may permit you to have a 42% debt ratio. You can find out how to calculate your income to debt ratio here.

Keep In Mind

Be aware of the “straw” purchase. A “straw” purchase is basically when you buy a car for someone else but put the loan under your name. This is considered bank fraud, and thus, it’s illegal. One of the reasons for this is because a car is considered collateral. If you are trying to purchase a vehicle for a loved one, you should sign as a co-signer or give them cash to put toward their purchase. They are not able to own the car if the loan is under your name. However, if the individual is considered your dependent, this is a different case.

Think about why you need the car. Reconsider the loan to save on interest if you are able to pay straight cash. If you plan to only use the additional vehicle as shuttle only or for limited driving, it may not be worth taking out a loan.


So, can you have two car loans at once? Yes, but not without requirements. Cases and circumstances do vary. You might want to make sure you would even qualify for a second loan by speaking with a few lenders first before picking out that next car. You’ll also want to review what new interest rates you could have as they might be higher depending on your current loan status.

Have you ever had to take out more than one car loan at the same time? Share your experience in the comments below!

One thought on “Can You Have Two Car Loans At Once?

  1. yes, I have taken a car loan for my friend because he was not eligible to apply for a car loan, but later I also needed a car for myself so at that time I applied for my second car loan. Because my Credit history and monthly Income was good therefore I got the loan easily.

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