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Having two cars isn’t abnormal for most families, but two car loans can put a strain on your finances. Before you apply, make sure you can afford it – and that you can prove it to your lender.

Can I have two car loans at one time?

You can have two car loans at one time, but it may be more difficult to qualify for a second loan. Lenders only approve you if your income and debt can handle the added monthly expense.

And even if you are approved, you need good to excellent credit to score a low APR. Without that, you ount – which limits how much car you can afford.

Is having two car loans at the same time a good idea?

It depends on your finances. Like any loan, applying for a second car loan will result in a hard credit check, which can temporarily lower your credit score.

A second car loan will also increase your debt-to-income ratio, which may make it more difficult to improve your credit after you buy your car. Future lenders may be more unlikely to offer you a good rate, and the added monthly cost could make it more difficult to budget for other regular expenses.

However, if you already have excellent credit, limited debt and a strong income, a second car loan may not have as big of an impact. With that said, you should still consider your options carefully and understand the full impact two car loans could have on your financial profile.

Can I finance a car with two loans?

You may be able to, but it’s not recommended. Borrowing two car loans for one car will only increase the amount of debt you have and make it more difficult to afford monthly repayments. Instead, consider financing a less expensive car or saving for a down payment to reduce the amount you have to borrow. Read the rest of this entry »