Is it bad to apply for multiple loans at once?
Yes, usually. Every credit application is recorded as a credit enquiry, and under Australia's credit reporting rules an enquiry stays on the file for five years. Applying to several lenders at once leaves a visible cluster that the next lender reads as distress rather than diligence — and it stays visible long after the problem is solved.
Two different questions arrive at this page, and they have opposite answers. One is about applying to several lenders at the same time, which is usually a mistake. The other is about having two loans at once, which is ordinary and is most of what we do. They get muddled because people search them with nearly the same words.
Applying to several lenders at once
Every application for credit is recorded on your credit file as an enquiry. Not the outcome — the enquiry itself. Approved, declined or withdrawn, the record that you asked is created either way, and the next lender can see it.
How long it stays is the part most people get wrong. Under the credit reporting rules the Office of the Australian Information Commissioner publishes, a credit enquiry stays on a credit report for five years. For comparison, on the same OAIC table a default also stays five years, a court judgment five years, repayment history two years and financial hardship information one year.
So an afternoon of filling in six online applications is not a private afternoon. It is six marks, visible for five years, to every lender who looks afterwards.
What the cluster actually signals
One enquiry says nothing much. Six in a fortnight says something, and it is not the thing the applicant intends.
The applicant believes they are being thorough — shopping around, comparing, doing what you are told to do with insurance or electricity. The lender reading the file sees a pattern that usually means something else: that the earlier approaches did not work, and that the person is running out of options. Some scoring models treat a burst of enquiries as risk on its own, independently of anything else on the file.
The cruelty of it is the timing. The enquiries are created at the worst moment — when you are under pressure and trying everything — and they outlast the pressure by years. The cash-flow problem is solved by Christmas; the enquiries are on the file until 2031.
What to do instead
Have the conversation before anyone searches anything.
Any competent lender can tell you whether a file is plausible from a description — the property, what is owed against it, the amount, the purpose and how the loan gets repaid. None of that requires a credit search. The question worth asking out loud, every time, is: does getting an indicative answer from you involve a credit enquiry? If it does, you have learned something useful about that lender before it costs you a mark.
An indicative answer from HomeSec does not involve a credit enquiry. It is a phone call about the property and the exit, and you get a real yes or no on the call rather than a form that leaves a trace.
If you have already been knocked back and are deciding what to do next, the narrower question — what the decline means and which lender type to approach — is answered on what to do after a business loan is declined. And if the file already carries enquiries, defaults or a judgment, borrowing with bad credit sets out what is actually assessed here instead.
Having two loans at once
This is the other question, and the answer is yes, routinely.
Holding more than one loan at the same time is normal commercial borrowing. A business can have a bank facility and a short-term loan running together; a property can carry a first mortgage and a second. That is not a workaround or a sign of trouble — a second mortgage is a registered loan that sits behind the one you already have, which stays exactly as it is, on its own rate and its own term.
What matters is not the number of loans. It is whether each one has a source of repayment that does not depend on the other.
Where a second loan goes wrong is where it is really paying the first — a borrower servicing one facility out of another, with no event at the end that clears either. That is the pattern worth being honest with yourself about, because no lender’s approval protects you from it.
The short version
- Applying to several lenders at the same time leaves a cluster of enquiries, each visible for five years, and reads as distress to the next lender who looks.
- Applying to the right lender once is worth more than applying to six of the wrong kind, and the way to find out which is right is to describe the file before anyone searches it.
- Having two loans at once is ordinary, provided each has its own exit.
This is general information about how credit reporting works in Australia, not advice about your own file. Your credit report is yours and you are entitled to a free copy from each credit reporting body; the OAIC’s credit reporting pages explain how to ask for it and how to have a mistake corrected.
Reviewed by Jason Brockmuller, Joint Chief Executive