The majority of personal loans range from $1,000 to $50,000, while some lenders may occasionally approve loans up to $100,000. Many personal loans are for a lot less. TransUnion research indicates that in the fourth quarter (Q4) of 2022, the average personal loan balance for new originations was $8,000.
The best personal loans have low interest rates; however, even with low interest rates, large personal loans may have high monthly payments. Consider all the options before obtaining a sizable personal loan.
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Installing solar panels and paying off medical bills are just two of the many things that personal loans are an excellent way to finance. You may be wondering, “How much personal loan can I get?” or, more accurately, “Can I borrow the amount of money I need,” if you’re planning a big purchase or considering using a debt consolidation loan to pay off debt.
We’ll go over loan amounts in detail below, including what they are, how they’re determined, and how to get approved for the amount you require.
How much personal loan can I get?
The typical range for personal loan amounts is $1,000 to $100,000. The exact range varies from lender to lender. For instance, some of the top providers of personal loans are those offering loans between $1,000 and $50,000, $2,000 and $30,000, and $5,000 and $100,000.
New borrowers typically take out loans for $8,200, according to recent data on personal loans. Personal loans provide borrowers with flexibility in terms of borrowing amounts, as they are available in a broad range. You can borrow the full $2,000 if that’s all you need to pay for auto repairs. But if your house needs some work, you can also find a $30,000 loan for home improvement.
What determines the size of my loan?
The amount of personal loan you are eligible for is determined by a number of particular factors, such as:
How much loan you should get depends on your budget. To calculate the monthly payments for loans of varying amounts, use the following calculator: Personal loan calculator: Amount borrowed {{ validateBalanceOwed }} Interest rate {{ validateInterestRate }} Suggested payback period (months) {{ validateExpectedPayoffTime }}
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Remember that your ability to borrow money will still be influenced by the first four factors mentioned above. If you currently owe a lot of money, you might not be eligible for a large personal loan. Lenders may be concerned that you won’t be able to repay a sizable personal loan in that case in addition to your other debt. Below, well explore these factors in more depth.
If you’re jobless, see our guide on obtaining a loan while jobless for further details on what to declare as income on a personal loan application.
Credit score and credit report
Your credit score is an evaluation of your ability to pay back debt. Each time you borrow money, make a credit card payment, or miss a loan payment, it appears on your credit report. Next, the data on your credit report, sometimes referred to as your “credit history,” is scored on a range of 300 to 850, which is your credit score.
Higher credit scores frequently allow borrowers to be eligible for larger personal loans. A high credit score can indicate to a personal loan lender the following:
- You have a history of paying debts as promised. Paying off debt on time is essential for having a good credit score because it accounts for over one-third of your credit score.
- You have a low credit utilization ratio. This figure contrasts the amount of credit you have available to you (i.e., your credit card limit) with the amount of credit you are currently using (i.e., your credit card balance). Don’t use all of your credit cards if you want a high credit score.
- You have the right mix of credit. Lenders prefer to know if you have prior experience repaying various loan kinds. You have a good combination if you have a mortgage, credit card, and auto loan. Having more than one form of credit, like credit cards, is beneficial for your credit score. To improve your credit, don’t apply for more loans or credit cards than you need to because this is only a minor factor.
- You are cautious about borrowing money. Your credit score is also impacted by the frequency of new credit applications you make for loans and credit cards. Not that you should never apply for credit; in fact, there are situations when it’s essential. However, your credit score decreases slightly with each credit application.
Maintaining a job can significantly increase your eligibility for and borrowing capacity for personal loans. The longer you have worked for the company (or in a comparable role with another employer), the more stable your position seems to be. Employment history is just one more factor that lenders consider when determining whether or not to charge back a personal loan, even though it has no bearing on your credit score.
Income and debt-to-income ratio
Your monthly income is one of the most important criteria in figuring out how much you can borrow. When you add another monthly payment to your mix, lenders want to see how your budget will look. A lender may use your debt-to-income (DTI) ratio as one indicator of this.
Your fixed monthly payments are added together by a lender to determine your DTI ratio. This covers credit cards, auto loans, mortgages (or rent), and other personal loans. After calculating the total, they split it by your gross monthly income, which is your take-home pay after taxes and other deductions.
Heres how one person might calculate their DTI:
Monthly total due: $1,275 ($850 for a mortgage, $325 for an auto loan, and $100 for a credit card).
Total monthly income, pre-tax: $5,000
DTI: $1,275 (monthly payments) ÷ $5,000 (monthly income) = 0. 25 = 25%.
In this case, the DTI is 25%. Its generally good to keep your DTI below 36%. Although each lender has a different maximum allowable DTI, it’s wise to keep yours as low as possible, particularly if you want to be eligible for a bigger loan.
Secured loan vs. unsecured loan
Most personal loans are unsecured loans. An unsecured loan has no collateral, so the lender cannot seize any of your belongings if you default on the loan. (The lender can still sue you, though. Some people may find it difficult to be approved for a large unsecured loan.
A secured loan might enable you to take out a larger amount. When applying for a secured loan, you must provide valuable collateral. If you don’t return the loan money as agreed, the bank may seize this collateral and sell it. Typically, you are able to borrow up to half of the collateral’s value. If your car is valued at $20,000, you can probably use it as collateral to get a $10,000 loan. Additional assets you may possess that could be used as collateral for a secured loan include jewelry, retirement funds, savings accounts, and other valuables.
How to qualify for a larger loan
It is possible to increase the loan amount you are eligible for if you qualify for a smaller personal loan than what is needed. Here are some suggestions for obtaining a larger loan amount:
- Shop multiple lenders
- Opt for a longer repayment term
- Enlist a cosigner
- Offer collateral (apply for a secured loan)
- Pay down existing debt
- Improve your credit score
- Increase your income
Shop multiple personal loan lenders
While comparing offers from several lenders is always a good idea, it becomes even more crucial if you want a large loan. To find out how much money each lender can offer, get prequalified with a number of lenders. Prequalification is a risk-free method to shop around because it shouldn’t affect your credit score (lenders use what’s known as a “soft credit check” to determine your credit score).
Compare the best personal loans
Get the best rates and terms to fit your needs. We would like to highlight the following loans, which include our award winners.
| Lender | APR Range | Loan Amount | Min. Credit Score | Next Steps |
|---|---|---|---|---|
| Apply Now for SoFi Personal Loans Rating , 5.0 out of 5 stars. 5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. |
Fixed: 8.99%-25.81% APR (with all discounts) | $5,000 – $100,000 | 680 | Apply Now for SoFi Personal Loans |
| Apply Now for Upstart Rating , 4.0 out of 5 stars. 4.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. |
5.20% – 35.99% | $1,000 – $50,000 | None | Apply Now for Upstart |
Opt for a longer repayment term
Inquire about extending the repayment period if you will soon need money. A longer repayment period will result in a smaller monthly payment, which may persuade the lender to grant you the necessary loan. However, keep in mind that longer repayment terms will result in higher interest over time.
Asking a loved one who has a solid credit history and high credit score to cosign the loan might be a good idea. The lender will then consider both of your credit scores instead of just yours when determining your eligibility. Recall that someone assumes risk when they agree to cosign a loan on your behalf. They are responsible for the money if you fail to make a payment. Ask someone to cosign a loan only that you are certain you can repay.
Offer collateral (apply for a secured loan)
As was previously mentioned, if you’re applying for an unsecured loan (one without collateral), you may be able to increase the amount of your loan by providing collateral and receiving a secured loan in its place. Additionally, if you are already providing collateral, providing something more valuable could increase the amount that is approved for you.
Pay down existing debt
Ask the lender for an explanation if you aren’t granted the loan amount you need. Your DTI may be too high. In that case, prioritize debt repayment prior to reapplying for a personal loan.
Improve your credit score
Increasing your credit score can make it easier for you to be granted a bigger loan. Searching your credit report for errors is one of the quickest ways to raise your credit score. For instance, a mistake could be that you took out a sizable loan that you never applied for or missed a payment that you didn’t miss. These can drag your score down. To begin with, obtain a free copy of your credit report, review it for errors, and notify the credit bureau of any that you find.
Visit our guide, What Credit Score Do I Need for a Personal Loan? for more details.
Getting a second job or starting a side business could increase your loan eligibility. The results of a side gig probably won’t become apparent for months, and it will take even longer to show a lender that your income has increased. Still, it could be worthwhile to use the additional time to boost your checking account while you wait for a loan if you need it for a large project like debt consolidation or home improvement.
Here are some other questions weve answered:
Not sure where to begin your search for a personal loan? Our top picks have lightning-fast approval times and unbelievably low interest rates. Look through our list to identify the ideal loan for you.
- There are personal loans available in amounts between $1,000 and $100,000. Your ability to borrow depends on a number of things, such as the lender you select and the amount it approves of. To find out how much you could borrow from each lender, you can go rate shopping.
- Your credit score slightly drops when you apply for a personal loan because the lender does a hard credit check on you. A hard credit check results in a credit score drop of less than five points for the majority of consumers. Additionally, a personal loan has the potential to raise your credit score. Making your loan payments on time will establish your payment history, which is the primary determinant of your credit score. One important factor in credit scoring is credit utilization ratio, which can be lowered by using a personal loan to pay off credit card debt.
- You will probably need a good or excellent credit score—that is, a credit score of 670 or higher—in order to qualify for a $30,000 personal loan. In order to confirm that you make enough money to cover the monthly payments, the lender will also carefully examine your income.
FAQ
How much can you typically get for a personal loan?
How Much Can I Get for a Personal Loan? A lot of lenders provide loans for amounts ranging from $500 to $50,000. While some banks and financial institutions only allow loans up to $20,000, others allow borrowers with excellent credit to receive up to $100,000 in loans.
How much of a personal loan can I receive?
The majority of personal loans have terms between six and sixty months and range from $100 to $50,000. Credit unions and banks are two examples of lenders offering personal loans. Your lender might extend credit to you in excess of what you require. Take care not to take out more loans than you can afford.
What’s the maximum you can borrow for a personal loan?
They don’t serve as a quote or a loan pre-qualification. Whether you require an unsecured or secured loan will determine the maximum amount you can borrow for a personal loan. A secured personal loan typically has a maximum borrowing amount of $100,000, whereas an unsecured loan typically has a lower maximum of $50,000.
How hard is it to get a $30,000 personal loan?
Even though having good to excellent credit is usually required to be approved for a $30,000 personal loan, you may still be able to qualify with poor or fair credit.
Read More :
https://www.fool.com/the-ascent/personal-loans/how-much-can-i-get/
https://www.nerdwallet.com/calculator/personal-loan-calculator