Whether you are looking for a personal loan for home repair, debt consolidation, or a big purchase, you may be wondering “How much of a personal loan can I get”.
Well, the exact amount you get depends on various factors, such as your monthly income, your credit score, and the debt-to-income ratio. It can range from anywhere between $1,000 to $100,000. But no matter how much you qualify for, it is important to make sure that you’ll be able to repay the amount.
In this guide, we will help you figure out how much of a personal loan you can get based on your specific financial situation. So read on to make an informed decision.
How Much of a Personal Loan Can I Get?
Personal loans are available from anywhere between $1,000 to $100,000. In fact, some banks and credit unions even offer personal loans of up to $100,000 if you have an extremely high monthly income and an impressive credit score.
However, the amount of money you get from a personal loan depends on a lot of factors, including your monthly income, credit score, current debts, debt-to-income ratio, and employment history, among others.
Let’s take a look at all of the factors that lenders consider before deciding how much they can lend you:
1. Credit Score
Your credit score is the first thing that lenders consider when reviewing your loan application. It shows your creditworthiness. The higher your credit score, the better the loan amount you will get. People with an excellent credit score (750) can get loan amounts of up to $100,000.
But if your credit score is low, you would appear as a high-risk borrower for the lender. Most lenders allow a minimum credit score of 650 to be eligible for a personal loan.
2. Monthly Income
Your monthly income is one of the most important factors that lenders consider when deciding the loan amount. If your income is high, you can acquire a larger amount as you will easily be able to repay the loan.
3. Debt-to-Income Ratio
Your debt-to-income ratio shows how much of your monthly income goes towards paying off your debts. It shows lenders whether you will be able to manage an additional monthly payment while repaying the existing debts. A DTI ratio of 35% or less is considered ideal by lenders.
4. Existing Debts
Another factor that lenders consider when determining the loan amount is the existing debt you have. The more outstanding debt you have, the lower the loan amount they will offer you.
5. Purpose of the Loan
Your lender will also inquire about the purpose of the loan before they decide the amount. Home improvement and debt consolidation loans are more favorable for lenders, meaning that you will get a higher loan amount.
6. Employment History
Having a stable and strong employment history can have a positive impact on the lender. It indicates that you are financially strong and capable of repaying the loan. If you have been unemployed for a long period of time, it may result in a lower loan amount for you.
7. Collateral
Although most personal loans are unsecured, some lenders do offer secured personal loans to reduce any financial risks for them. Secured personal loans have a lower interest rate. However, if you default on the loan, your collateral can be seized.
What to Consider Before Accepting a Loan Amount
While a personal loan offers financial relief, it is important to borrow money responsibly to avoid any distress. So before you accept a loan offer, make sure to determine whether you will be able to afford the repayments without any burden.
You can use our Personal Loan Calculator by entering the loan amount, loan term, and interest rate to calculate the monthly payments and the overall cost of the loan. You can adjust these variables to come up with a monthly payment that fits their monthly budget.
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Frequently Asked Questions (FAQs)
How Much of a Personal Loan Can I Get With Bad Credit?
Lenders have a limit on how much you can borrow if you have bad credit. With a bad credit score, you can typically only get loans of up to $5,000. Additionally, you will get stricter loan terms and a higher interest rate if you get a bad credit loan. So while you can still get a personal loan with bad credit, the terms are not usually favorable.
How Much of a Personal Loan Can I Get With a 750 Credit Score?
A credit score of 750 is considered an excellent credit score. So you can get a maximum loan amount from most lenders, typically up to $100,000. What’s more, you will get quite favorable loan terms along with lower interest rates. However, the amount you get also depends on other financial factors like your debt-to-income ratio and your monthly income.
How Much of a Personal Loan Can I Get With a 700 Credit Score?
A credit score of 700 is considered a good credit score. It can get you a fairly good loan amount, typically up to $75,000. What’s more, you will get easy loan terms and a competitive interest rate. However, the amount you get also depends on other financial factors like your debt-to-income ratio and your monthly income.
How Much of a Personal Loan Can I Get With a 650 Credit Score?
With a credit score of 650, you may be eligible for loan amounts up to $50,000. It is considered a fair credit score. However, at 650, you may get a higher interest rate as compared to people with good or excellent credit scores. But if you have a stable income, you can still get favorable loan terms.
How Much of a Personal Loan Can I Get With a 600 Credit Score?
With a credit score of 600, you may not be eligible for a large loan amount. It is considered a “below average” credit score and can only get you personal loans of up to $10,000 at higher interest rates. Additionally, the loan terms will not be flexible.
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