In order to make ends meet, you may have considered taking out a personal loan. But how do you know what your options are? We’re here with the top ten things to consider before deciding whether or not it’s best for you.

The “what is the biggest loan you can get from a bank” is something that many people are curious about. The answer to this question will vary by person, but on average you can take out around $100,000 in personal loans.

You may be surprised by how much you can take out in personal loans

You may be wondering how much you can borrow with a personal loan if you’re planning a significant purchase, home upgrades, or debt consolidation.

Personal loans can come in small and large amounts, from a few hundred dollars to tens of thousands. Some lenders even offer personal loans for up to $100,000. And hard money lenders may go even higher. Of course, not everyone can qualify for a loan of that size. And you might not even need or want to borrow that much. But if you’re trying to figure out how big of a personal loan you can — or should — get, here are a few things to consider.

Is the purpose of a loan important?

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How Much Money Can You Borrow for a Personal Loan?

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The usual personal loan is from $1,000 to $50,000. However, maximum loan amounts vary greatly depending on the lender and a number of other circumstances, such as the borrower’s creditworthiness, whether the loan is unsecured or secured, and what the money will be used for.

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What Factors Affect the Maximum Amount You Can Borrow with a Personal Loan?

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Even if a lender provides substantial personal loans, you may not be able to get the whole amount. The following are some of the elements that may influence the amount you may borrow:

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1. Your credit rating

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If you’ve been looking into personal loans, you’ve probably seen that your credit score has an impact on the interest rates that different lenders offer. But did you realize that your credit score has an impact on the amount you may borrow? If you have a decent credit score, or even a very excellent or outstanding score, you might expect to get approved for a larger loan than someone with a lower score.

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2. Credit Reports

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Lenders will also look at your credit reports for signals that you could be a hazardous borrower, which may involve looking at negative information from the past. After seven years, the majority of bad material on your credit record must be deleted. Some things, such as a bankruptcy, may remain on the record for up to ten years. (If you’re not sure what’s on your credit report, you can get a free copy from each of the main credit agencies once a year.)

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3. Debt-to-Income Ratio and Income

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Lenders want to make sure a borrower can afford the monthly payments on a loan, therefore you may discover that a higher loan amount comes with minimal income criteria. Lenders will also analyze your debt-to-income ratio (the proportion of your gross monthly income that goes toward paying down your debt) to see whether you can afford another fixed monthly payment.

In general, a lower debt-to-income ratio (DTI) is preferable.

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4. The Loan’s Purpose

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Some lenders may inquire about how you plan to utilize the money you’re borrowing, but this isn’t always a concern. The loan amount and interest rate you’re given may be affected by the loan purpose in certain situations. Furthermore, some lenders impose limitations on how a borrower might utilize a personal loan.

Whether you’re considering about utilizing a personal loan to pay for a down payment on a property, check with your mortgage lender to see if it’s possible. Many lenders will not allow borrowers to utilize a personal loan to pay for a down payment for a home.

If you need a same-day, rapid personal loan for an emergency, you may have to go another method. Just be sure you’re borrowing from a trustworthy source.

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5. Making Use of a Cosigner

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If you need a credit boost to fulfill a lender’s large-loan criteria, adding a cosigner with strong credit and a larger salary to your application may be beneficial.

However, make sure the individual you pick understands what they’re signing up for. If you miss payments or default on the loan, your cosigner’s credit score may suffer. They may be forced to take over your payments if you are unable or unwilling to meet your obligations. Any relationship might be severely strained as a result of this.

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6. Added Value

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Most personal loans are “unsecured,” which means you pledge to repay the money within a certain time frame but aren’t putting up any kind of collateral that the lender may seize if you don’t. This increases the lender’s risk, which might result in a higher interest rate or a smaller loan amount.

If you select a secured loan, a lender may be ready to provide you a bigger loan and/or a cheaper interest rate if you present your automobile or other valuable property as collateral.

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7. A Loan with a Longer Term

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If you choose a longer payback period, a lender may be ready to grant you a greater loan amount. The borrower may have two to five years to repay the money on most personal loans. However, if the loan is for a longer period of time — maybe 7, 10, or even 15 years — the payments may be smaller and more reasonable.

However, even though the monthly payments would be smaller, the total cost of the loan would be greater since you would be paying interest for a longer period of time.

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The Lender (#8)

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The amount of the loan and the restrictions for qualifying differ from one lender to the next. Moreover, depending on your credit history and other circumstances, a single lender may provide a variety of loan amounts. Using an internet comparison tool may make checking numerous offers at once simple and quick.

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Questions to Ponder Before Taking Out a Larger Loan

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While you’re researching the question “How much of a personal loan can I get?” you also might want to ask yourself, “How much should I be borrowing?”

You don’t have to or should accept the whole amount just because a lender claims you qualify for $50,000 or more. You should think about these questions before accepting the lender’s offer.

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1. What is the maximum monthly payment you can afford?

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Whether you keep a monthly budget, you may already know how much more debt you can add — or if you can eliminate or cut another item in return for the additional loan payment. However, you may use an online personal loan calculator to figure out how much you can pay by experimenting with various loan amounts, interest rates, and loan terms.

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2. What Is Your Loan’s Purpose?

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It’s conceivable that the lender you pick will not inquire about your reasons for considering a personal loan, but you should. It could be a good idea if you’re trying to better your financial situation. For example, paying off high-interest credit cards with a lower-interest personal loan might save you money in the long term. A personal loan may be your best choice if you have a large expense to pay, such as a costly medical operation.

However, if you’re considering taking out a significant personal loan to pay for a costly vacation or a few visits to the mall to buy new clothing, you should think about how it will effect your other financial objectives, both now and in the future.

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Large Personal Loan Alternatives

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When you need money, a personal loan might be a wonderful alternative, but it isn’t always the best option. Some more techniques to think about include:

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Credit Card with a 0% Interest Rate

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If you want to pay off high-interest credit card debt, you may be able to utilize a credit card with a 0% balance transfer fee. This comprises transferring debt from one or more credit cards to a new card for a certain length of time (or promotional period). You may have to pay a balance transfer charge, but you may not have to pay interest for a year or more. (However, you must ensure that you can pay off the debt on the new card before interest accrues.)

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2. HELOC (Home Equity Line of Credit)

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Homeowners who have built up some equity in their house may wish to explore a home equity loan or line of credit (HELOC). The disadvantage of this choice is that if you can’t make your loan payments, your house may be at danger. However, you may be able to acquire a cheaper interest rate on a secured personal loan than you would on an unsecured personal loan.

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3. Refinancing with Cash-Out

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A cash-out refinancing is another option for homeowners with sufficient equity in their property to get some much-needed cash. Obtaining a new mortgage for a greater amount — and, ideally, a cheaper interest rate — than the previous mortgage is the first step. The difference is subsequently paid to the borrower in cash. However, this option may include paying closing charges, which may increase the total cost of borrowing. You’ll also lose the equity you’ve worked so hard to accumulate in your house.

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The Remainder

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A crucial step in obtaining a personal loan is determining the amount you can and should seek. However, it’s also crucial to consider how much the loan will cost.

Personal loan annual percentage rates (APRs) are decided by a number of criteria, including your credit score, debt-to-income ratio, and loan size.

More information is available at:

MediaFeed.org syndicated this story, which first published on LanternCredit.com.

The advice on this page is generic in nature and does not take into consideration your individual goals, financial condition, or requirements. You should always examine whether or not they are acceptable in your situation.

SoFi’s Lantern:

 

 

SoFi Lending Corp., a lender regulated by the California Department of Financial Protection and Innovation under the California Financing Law, license number 6054612; NMLS number 1121636, owns the Lantern website. (www.nmlsconsumeraccess.org)

All prices, fees, and conditions are provided “as is” and are subject to change at the discretion of each supplier. There is no promise that you will be accepted or that you will be eligible for the stated rates, fees, or terms. The particular terms you’ll get are determined by criteria such as the perks you’ve requested, your credit score, use, and history, among others.

*Check your rate: Lantern and/or its network lenders do a soft credit pull to see what rates and conditions you qualify for. This does not effect your credit score. If you pick a product and proceed with your application, the lender(s) you choose will request your complete credit report from one or more consumer reporting agencies, which is referred to as a hard credit pull and may have an impact on your credit.

All loan terms on this website, including interest rate, Annual Percentage Rate (APR), and monthly payments, are from lenders and are estimates based on the limited information you provided. They are provided for informational purposes only. As required by the Truth in Lending Act, the estimated APR includes all applicable costs. The conditions of your loan, including the APR, will be determined by the lender you choose, their underwriting requirements, and your particular financial circumstances. The lenders, not SoFi Lending Corp. or Lantern, supply the loan terms and rates shown. For further information, please read the terms and conditions of each lender.

Your credit ratings and the interest rates you may be offered are influenced by a variety of variables. SoFi does not qualify as a credit repair organization under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services, nor does it offer advise or help with “rebuilding” or “enhancing” your credit record, credit history, or credit rating. Visit the FTC’s credit website (https://www.consumer.ftc.gov/topics/credit-and-loans) for further information.

Financial Tips & Strategies: The advice on this page is generic in nature and does not take into consideration your individual goals, financial condition, or requirements. You should always examine whether or not they are acceptable in your situation.

Loans for individuals:

This Personal Loan product is operated by SoFi Lending Corp. (“SoFi”) in collaboration with Even Financial Corp. (“Even”). Whether you make a loan enquiry, SoFi will send your information to Even, which will then send it to its network of lenders/partners to see if you qualify for pre-qualified or pre-approved offers. Your credit information will be obtained from a credit reporting agency by the lenders/partners that get your information. Pre-qualified and pre-approved offers from one or more lenders/partners will be given to you here on the Lantern website if you fulfill one or more lender’s and/or partner’s eligibility requirements. On our Personal Loans website and our Student Loan Refinance page, you’ll find more information about Even, the process, and its lenders/partners, as well as a loan enquiry form. Learn more about Even’s Licenses and Disclosures, Terms of Service, and Privacy Policy by clicking the links below.

The APR on personal loans offered to Lantern consumers does not exceed 35.99 percent. In the case of a $10,000 personal loan with a 36-month duration and a 10% interest rate, the total amount paid would be $11,616.12 during the loan’s 36-month tenure.

Refinancing Student Loans:

This Student Loan Refinance program is operated by SoFi Lending Corp. (“SoFi”) in collaboration with Even Financial Corp. (“Even”). Whether you make a loan enquiry, SoFi will send your information to Even, which will then send it to its network of lenders/partners to see if you qualify for pre-qualified or pre-approved offers. Your credit information will be obtained from a credit reporting agency by the lender receiving your information. Pre-qualified and pre-approved offers from one or more lenders/partners will be given to you here on the Lantern website if you fulfill one or more lender’s and/or partner’s eligibility requirements. On our Personal Loans website and our Student Loan Refinance page, you’ll find more information about Even, the process, and its lenders/partners, as well as a loan enquiry form. Learn more about Even’s Licenses and Disclosures, Terms of Service, and Privacy Policy by clicking the links below.

Lantern’s student loan refinancing loans are private loans, thus they don’t come with the same debt forgiveness or repayment alternatives as the government loan program, such as Income Based Repayment, Income Contingent Repayment, or Pay as You Earn (PAYE).

Notice: Due to recent legislative developments, all federal student loan payments have been halted and interest rates on federally owned loans have been waived until May 1, 2012. Please carefully evaluate these changes before refinancing federally held loans, since you will no longer be eligible for these or other future federally held loan advantages if you do so.

Refinancing a Car Loan:

Caribou provided the information about auto refinancing loans to this Lantern page. The auto loan refinance information on this Lantern site is indicative and is contingent on you meeting the lender’s requirements, which include meeting the lender’s credit standards, having a loan amount of at least $10,000, and having a vehicle that is no more than 10 years old with no more than 125,000 miles on the odometer. The loan rates and conditions shown on this Lantern site are subject to change when you contact the lender, and your creditworthiness may be a factor. Additional terms and restrictions may apply, and all terms are subject to change depending on your location.

Disclosure of Secured Lending:

Terms and conditions apply, as well as state limits and minimum loan amounts. Before you apply for a secured loan, we recommend that you think about whether this is the correct loan for you. If you fail to make payments on a secured personal loan, you risk losing the assets you pledged as collateral. Not all borrowers will be eligible for greater loan amounts or the best lending conditions. The capacity to fulfill underwriting standards (including, but not limited to, a respectable credit history, adequate income after monthly costs, and collateral availability) that vary by lender determines loan acceptance and conditions.

Insurance for life:

SoFi Life Insurance Agency, LLC provides insurance information on Lantern. To see our licenses, go here.

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MediaFeed has more.

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AlertMe

The “how much of a personal loan can i get with a 700 credit score” is a question that many people ask themselves. It is important to know how much you can take out in loans because it will help you decide what type of loan you need, and how much money you should borrow.

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