Laws limiting the number of loans a borrower can take to protect you from lending too much.

The number of payday loans that a person can have out at a time depends on the lender they choose, but most lenders and states will not allow more than two outstanding loans at any given time. There are a few reasons for this, but these laws are intended to protect both borrower and lender.

When a borrower takes a payday loan, it comes with a term (the amount of time in which the loan must be repaid). Having more than one loan in the same term would make it very hard to pay them both back. This hurts the payday lender because it substantially raises the default risk- most will check to see how many outstanding loans the borrower has. The practice is meant to keep the borrower from digging themselves even further into debt.

If you aren't sure which laws your payday lender has to follow, call them and ask. Every lender has to follow certain rules, and to know what you are up against, you should visit their website and read the fine print- or call/visit them in person. Some lenders claim that they don't use Teletrack to see how many loans a borrower has outstanding, or whether they've been repaid. Steer clear of these, because they could induce you to apply for too many loans at once. Yes, that may resolve a short-term financial shortfall, but problems will come when the loans are due to be repaid.