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Can You Have 3 Car Loans? Here’s What You Need to Know

Can You Have 3 Car Loans
Written by Okosun John

How many car loans can you have at the same time? Find out in this article.

Are you wondering Can You Have 3 Car Loans? This post is for you.

Most people aren’t aware that they can have multiple car loans, but it’s not uncommon in the least.

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If you want to know if you can get more than one car loan, what they’re useful for, and how to decide whether you should apply for more than one, read on!

Can You Have 3 Car Loans?

It’s technically possible to have three car loans at the same time, but this is difficult to qualify for and lenders typically only approve if your monthly income and debt levels can handle the added expense.

And even if you are approved, you need credit that is good to excellent in order to get a low APR. Without that, you will most likely be faced with higher rates and a lower total loan amount.

Is Having Three Car Loans at the Same Time a Good Idea?

Having three car loans at the same time seems like a bad idea, but it’s possible. However, the process of getting that many loans and not running into any issues is a very challenging one.

Your best bet is to refinance all three of your car loans at once, or consolidate them into one vehicle loan. Ideally, you should try your best to avoid having more than two car loans at any given time; it makes life harder on you financially.

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But if you do have three car loans at the same time, be aware that there are rules around how much can be paid per month and when certain payments need to be made by.

Problems of Getting a Third Car Loan

Having a third car loan might make it difficult for you to pay back both debts. If your credit score is not good enough, you will be unable to get a third car loan easily.

If you have only one or two cars and your income isn’t stable, you should try to avaoid getting a third car loan.

Getting a third car loan can be risky since most lenders offer no more than two loans at a time.

The following problems might occur if you get three car loans.

Increased scrutiny from lenders

Lenders evaluate your creditworthiness, current debt load, payment history, and income in order to see if you’re good enough for a car loan.

They will also ask for information about the vehicle, such as the sales price, to see if the sales price is fair.

There is even more of a need for personal verification when you apply for a second car loan.

Given the significant step of adding to your financial obligations, the lender will want assurances that you can still pay the bills on time.

Though it’s not impossible, you may be rejected for credit if your credit score is too low or your debt is too high relative to your income.

Difficulty finding credit after securing the loan

Lenders look at your credit score when you apply for debt products, such as a credit card or loan. The higher your score, the less of a credit risk you are, and the more you can ask for, such as low interest rates.

A low credit score could result in denial of your loan or a higher interest rate.

This makes it hard to get other credit while you wait for your credit score to improve. For each new credit inquiry, a hard credit inquiry is generated, which can decrease your credit score temporarily.

You won’t have to pay each time you have a hard pull if you apply for an auto loan within a time period and FICO will group all your hard inquiries into one inquiry.

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You will have increased debt once you finance a third car.

Your credit utilization ratio counts for 30% of your credit score, so if you make late payments it could affect your score.

Your score will probably rebound after a few months of making payments to the lender since the history of payments to lenders is the most significant component of the FICO-scoring formula.

Additional insurance costs

By adding a third car to your policy, your premiums will increase, but the process is rather simple, so it shouldn’t take much of your time.

When you call the insurance company, you’ll need the vehicle identification number (VIN), year, make, model, and license plate number handy.

Some providers also offer discounts to customers who insure two or more vehicles on the same policy.

This type of insurance is sometimes called a multicar discount, and to be eligible you need to have your cars registered and insured at the same address.

How to Improve Your Chances of Getting a Third Car Loan

Since only a small number of car dealers or lenders allow for a third loan, you’ll have to be prepared to handle some special requirements.

Specifically, you’ll need to shop around for a lender that allows for multiple loans and then be able to convince them that your credit history can handle it.

There are lots of ways to improve your chances, including: paying off your previous car loans as quickly as possible and staying in touch with your lenders/dealers throughout payments.

If all goes well, you should have no trouble getting approval for a new vehicle loan!

Dispute credit report errors

Get a copy of your credit report from Experian, TransUnion, and Equifax, then read over it and circle any errors you find.

File disputes with the appropriate credit reporting agency promptly, so inaccurate information doesn’t weigh your credit score down.

Pay down revolving debt

The optimal thing to do is to have an income which can cover all your monthly debt payments.

However, payments for installment loans are set in stone, while credit card payments can be changed, resulting in a better debt-to-income ratio.

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Apply with a coapplicant

An application with a spouse or parent can help to boost your income and credit score rating.

It is worth noting, however, that not all lenders allow co-applicants, and make sure that whoever you are applying with is going to share equal responsibility for the loan, and will need to have their name included on the title.

Save up for a large down payment

A substantial down payment is usually 20% or more of the car’s worth, indicating your capacity to take on a larger loan.

That also means you will have a lower monthly payment for your second car.

Switch to a less expense car

Lowered payments on your current car will show that you can afford a second loan and do so without bringing your financials into disarray.

What if the third car loan is for a third party? e.g My Daughter

When your daughter is not yet 18 and is ineligible for a loan on her own, the best course of action is for you to act as a cosigner for her, essentially the two of you will apply for the loan.

Although she has a less-than-thick credit history, she can lean on your credit when she is older, once she’s built up a healthy history of on-time loan payments.

In time, she can even refinance with her good credit and remove you as a cosigner. She might be able to obtain a lower interest rate and more flexible loan terms as a result.


Although it may seem counterintuitive, you can indeed have three car loans at once. But before you rush out and try to get your hands on a third loan, there are a few factors that you should consider carefully.

If you don’t have sufficient income or assets to comfortably support three loans—or if having three car loans will hurt your credit rating—it’s probably best for your financial health that you stick with just two.

If, however, you’re confident in both your ability to repay multiple loans and in your ability to maintain high creditworthiness over time, then three car loans may not be a bad idea after all.

With everything said and done: Can You Have 3 Car Loans? Yes!

About the author

Okosun John

A B.Eng. holding mechanical engineer with love for content creation and web development.