Loan stacking and credit card stacking have seen their share of both positive and negative views in the financial world. Consumers have stacked loans for legit purposes all the way to not-so-legit purposes and fraud.

Loan stacking is obtaining multiple loans from multiple lenders and is typically used to fund a high-ticket purchase. Credit card stacking is following the same practice, applying for multiple credit cards at the same time with the goal to obtain the desired credit amount between all of the cards.

Why would someone take such financial risks? For some people, when there’s something that they really want to purchase, or they feel confident in their investment in what they are buying, they will oftentimes do whatever they can to make it happen.

Despite all of the financial and credit risks, there are still those who are willing to take said risks, such as:

Real Estate Investors/Flippers – Some investors who are short on cash to fund their deals end up resorting to credit card stacking to quickly build up enough capital they can borrow cash to fund their deals. While extremely risky, this practice is still used today by some investors.

Although loan stacking for mortgages has been seen as high risk and also used fraudulently, there are legitimate cases where multiple loans can and often are used to fund larger real estate deals.

In fact, back between 2013 and 2015, loan stacking more than doubled with 4.5% of loan applicants applying for additional loans the same day, according to Transunion (as reported by the Wall Street Journal). Whether or not these unsecured personal loans were used for real estate is unknown,

Entrepreneurs Funding Their Start-ups – We have all heard the stories… A hot new tech start-up and the latest success story was fully funded by an entrepreneur who maxed out his or her credit cards or used credit card stacking or loan stacking to obtain the capital they needed to launch their business. Unfortunately, although we do hear about the rare success stories, there’s a mountain of untold stories of debt and bankruptcy due to this extremely risky gamble financially.

Small Business Owners – Sometimes life happens, especially with all of the changes and unfortunate events that 2020 brought to so many small business owners. Some have had to rely on credit card stacking or loan stacking to keep their business afloat during difficult times. Others had to utilize the stacking method to cover the costs of inventory or other business purchases to preserve cashflow. Regardless of the uses, there are both stories where this method worked successfully and stories where business owners were unable to pay back the debt.

Like with real estate, there are financially sound reasons where loan stacking may be the best option for a business owner when there are no other funding options available. Every situation and use case is different, and business owners need to weigh their risk tolerance and pros and cons of stacking loans.

Individuals To Cover The Cost of High-Ticket Coaching, Training, Events, Masterminds, or Courses – Prior to the availability of financing for coaching programs, options to obtain funds were limited. For many years, credit card stacking has been used at seminars and by coaches, consultants, and trainers to help individuals get the funds they need to invest into their programs. Depending upon the individual who stacked credit cards or loans, the end result may have been successful, or not.

Loan stacking to obtain the capital needed to pay for high-ticket services can come with high risks, especially if the individual obtaining all of the credit cards or loans is maxing out their credit.