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If you have bad credit, a low income, or other financial problems that would get you denied for financing through your bank, a payday loan is an easy but expensive way to access $100 – $1,500 in fast cash. These loans come with high-interest rates of around 300% to 600% APR, as well as short payment terms of 14 days. Typically, you’ll need to repay the full loan, plus interest and fees all at once.

Now that you know what these products are, you may be wondering if you can have two payday loans at the same time. Keep reading to find out if that’s a possibility in Canada.

Can I Get Multiple Payday Loans At The Same Time?

In most provinces, you can’t apply for a second payday loan, from the same lender or a different lender, before you’ve paid off the full balance of your first. 

This is usually because the provincial government has imposed laws that prevent lenders from offering “rollovers”.

What Does It Mean To Roll Over Your Payday Loan?  

A rollover (also called a renewal) is when what owe from your first loan is combined with or rolled into a second loan. Thus, on your next due date, you will owe the amount from your first loan and your second loan, creating what is called the payday loan cycle of debt. 

Provinces That Do Not Allow Rollovers 

As of 2022, six out of ten provincial governments have completely outlawed payday loan rollovers and extensions:

  • Alberta
  • British Columbia
  • New Brunswick
  • Nova Scotia
  • Ontario
  • Saskatchewan 
Note: Payday loans are extremely expensive and can lead to a cycle of debt if you’re unable to repay the full amount borrowed. To Learn about the payday loan laws in your province, click here.

Can I Get Another Type Of Loan If I Have A Payday Loan? 

As you can see, payday loans come with some serious downsides, especially when you have more than one. So, if you need access to credit, there are other credit products you can qualify for, including:

Credit Card Cash Advance

If you have a credit card, you may be able to take out a cash advance at an ATM. Although you’ll have to pay a $20 – $30 fee and 19% – 24% interest daily. While this could be a viable option for a small amount of cash, it can end up being just as expensive as a payday loan in the long run.

Personal Loan

Many alternative lenders can also offer you a more traditional installment loan, even if your finances and credit aren’t great. Terms are often flexible (several weeks, months or years) and rates vary from 8% to 47%.  Even if you don’t have great credit, you still qualify for a loan with an alternative lender.

To increase your chances of qualifying for a personal loan with bad credit, reduce your current debts by as much as you can. This will reduce your debt-to-credit ratio, which is a common factor used by lenders to determine creditworthiness.

Overdraft

Some bank accounts allow you to withdraw more money than your actual balance. You can opt to add overdraft protection to your account if offered by your bank. Most overdraft protection has a monthly fee or a per-use fee, for example, $5. Furthermore, you’ll typically be charged a set daily interest rate on the amount you overdraw. Overdraft protection and fees vary greatly depending on the bank.

Auto Title Loan

You could also consider a vehicle title loan. This is where your vehicle is used as collateral to secure the loan. While this can be an expensive option, it is more affordable than a payday loan and you’ll benefit from installment payments.  

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Can I Get A Second Payday Loan If I Pay Off My First?

Yes, if you pay off the full balance of your first loan and wait an appropriate amount of time before applying again, most lenders will gladly approve you for a second payday loan. That said, there are a few things you should do before you apply again, such as:

  • Consider Your Budget – After you’ve paid your first loan, you may be strapped for cash, so it’s probably not a good idea to take out another payday loan if you won’t be able to afford it when combined with your other expenses. 
  • Confirm Your Eligibility – Depending on where you apply and how you handled your payday loan, some lenders may not allow you to borrow a second loan so soon after your first. Either way, you shouldn’t apply if you’re not 100% qualified.   Watch Out For Rollover Fees – If you live in an area where rollovers are legal and you apply for another payday loan before your first is paid, your lender may add a refinancing fee to your original balance, which can lead to serious debt.

Payday Loan Alternatives In Canada

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What Happens If I Manage To Get Multiple Payday Loans At The Same Time?

In most provinces, taking out a second payday loan or having your first one rolled over into a second one is illegal. It’s unlikely that you will get a second payday loan from your original lender because you’re already in their system. It’s possible you may get a second loan from a different lender if they don’t bother to check whether or not you already have a payday loan.

No matter the reason, there are a number of things you should do if you somehow manage to acquire two payday loans at the same time, including but not limited to:

  • Make Sure Everything Is Legal – Unfortunately, if you’re approved for multiple payday loans, it could be a sign that your lender is up to no good. If you live in a rollover-friendly area, a legitimate lender must still wait a specific amount of time before approving you for another loan and if you don’t, that could also be a red flag.
  • Proceed With Extreme Caution – Even a single payday loan can eventually cause unmanageable debt, so if you’re going to apply for more than one, you shouldn’t do it unprepared. The payday loan cycle of debt is hard to get out of and can cause long later financial issues.
  • Rethink Your Strategy – In the end, a second payday loan might not actually be large enough to cover the full balance of your first. So, you would only be taking on more debt, with none of the benefits that come with a normal bank loan. There are safer options available, no matter what your finances and credit look like.  

Final Thoughts On Multiple Payday Loans

Despite the fact that rollovers are permitted in some regions of Canada, it’s important to remember that payday loans can cause severe debt problems when used irresponsibly. Taking on more than one payday loan is never a good idea.                

Multiple Payday Loan FAQs

Can a lender extend your payday loan?

Some payday lenders are legally permitted to extend a payday loan term but only in the following provinces and territories:
  • Manitoba
  • Newfoundland and Labrador
  • Nunavut
  • Northwest Territories
  • Prince Edward Island
  • Yukon

How long do you have to wait to take out a payday loan after paying one off?

Once you cover the full balance of a payday loan in an area where rollovers are illegal, lenders must wait at least 24 hours before they allow you to apply for another.  

Can I get multiple payday loans from different lenders?

Generally, no. Prior to approving you for a loan, many payday lenders will check their system. If they see that you already have an active payday loan with them or somewhere else, there’s a good chance they’ll turn down your application. 

Can I get multiple payday loans from the same lender?

No, the vast majority of Canadian payday lenders will not approve you for more than one loan because of all the restrictions their provincial government has established. Always do research and be 100% certain that your lender is operating their business with complete legality before you give them any of your time, information or money. 
Bryan Daly avatar on Loans Canada
Bryan Daly

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.

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