How to qualify for a $7,500 personal loan

If you want to consolidate high-interest debt, take on a home improvement project, or need extra cash to get through a financial emergency, a $7,500 personal loan could be a reasonable choice. When the math makes sense and aligns with your financial goals, it’s time to go through the steps to understand if you qualify for a $7,500 personal loan.

To improve their chances of approval, applicants may want to improve their credit score and debt-to-income ratio, among other key factors. Here’s a look at what you need to know if you want to qualify for a $7,500 personal loan.

Key Takeaways

• Credit scores and credit reports are among the most significant factors when applying for a new loan.
• Your monthly income compared to your monthly debt payment obligations is a key metric lenders use to decide if you can afford the loan.
• No application is guaranteed to result in a loan, but demonstrating overall financial health may improve your likelihood of being approved for a personal loan.

Tips to improve chances of qualifying for a $7,500 personal loan

When individuals need a $7,500 personal loan but don’t know if they can qualify, they can improve their chances of approval or overall borrowing experience by following these common strategies:

• Get prequalified: Prequalification is an industry term for when lenders conduct a brief, high-level review of your credit that is often automated using computer systems to estimate if the borrower would be approved using only a soft pull on their credit (which doesn’t impact their credit score). A prequalification isn’t a guarantee of approval, but it can help you get an idea of your approval odds and potential interest rates.
• Use a co-cosigner: A cosigner is someone willing to share their credit with you to help you get approved, but they also take on any obligations to repay the loan. If you have a close family member or friend with good credit who is willing to accept the risk, it could help you get approved. Note that Rocket Loans doesn’t use co-signers for personal loans at this time, but we encourage you to get prequalified for a personal loan to understand how much you may be able to borrow directly.
• Choose a secured loan: A secured loan is a type of loan where the lender can seize an asset if the borrower stops making payments as agreed. A car and a mortgage are common examples, but personal loans can also be secured by collateral if allowed by the lender. You may also find lower interest rates when comparing secured and unsecured loans.

5 steps to get approved for a $7,500 personal loan

Now that you know more about how lenders look at your loan application, let’s look at some steps you can take to evaluate your need for a loan and to analyze which loan terms may be right for your personal situation.

Step 1: Evaluate your financial need for the loan

Before you begin filling out an application, review your finances to determine if you truly need the loan. In some cases, a few minor financial moves could be all it takes to reach your goal.

If you decide a loan is the best choice for you, look at the amount. You may find that $7,500 isn’t enough to cover your needs. For example, after considering the credit cards you want to include in a debt consolidation or a breakdown of the supplies and labor costs for a home upgrade, you may realize you need more or less to accomplish your goals. Reviewing your latest credit card balances or getting a quote from a contractor could help you pick the ideal loan size.

If you want to use the loan for other expenses, review your budget and complete financial picture to determine if you need the funds and if you can afford to repay the loan as agreed.

Step 2: Explore personal-loan options

Next, it’s time to search for personal loan options. You may find unsecured personal loans preferable, as they’re often a quicker route to approval and don’t require collateral. However, those with lower credit scores may only be approved for a secured personal loan.

In addition to loan types, it’s essential to spend time researching the best lenders for the type of loan you choose. Consider all available loan terms, including the number of months, interest rate, and any other fees.

A longer loan term may result in lower monthly payments but a higher total interest cost over the loan's duration. You can compare different loans most easily using the annual percentage rate (APR), which tells you the cost of borrowing each dollar per year.

Use a personal-loan calculator

You can use an online loan calculator to see the impact of different loan options quickly. You may also want to know how to calculate monthly payments for loans on your own to make more informed borrowing decisions.

Step 3: Compare rates from lenders

Many lenders allow you to complete a short prequalification without any impact on your credit score to view your potential loan options. That’s a low-risk method of comparing loans at different lenders before making any commitments.

In addition to rates and fees, you may want to look at the lender’s reputation and customer service reviews to know it’s a company you’ll enjoy working with. You can learn more about comparing lenders to make a more confident borrowing choice as you navigate different loans.

Assess interest rates and fees

Interest rates and fees are the charges lenders impose for lending money. The breakdown of fees helps you understand which you may be required to pay and which you can reduce or avoid.

Your interest rate will likely be lower if you have excellent credit, as lenders use your credit score to determine the risk that you won’t repay. A higher risk means you’ll usually have to pay more to borrow. That can also extend to origination fees.

Origination fees typically range from 1% to 10% of the loan amount. Lenders may consider your credit score, the length of the loan, and the amount of the loan when calculating their origination fees. Rocket Loans charges up to 9.99% of the amount you borrow. APR helps you compare the all-in cost of a loan, including interest and fees.

Beware of hidden charges

Reputable lenders clearly disclose all potential fees. You can usually find a detailed list of possible fees in the loan’s documentation. As the saying goes, read the fine print before you sign to protect yourself and know what you’re getting into.

Common fees include late payment, returned payment, and early repayment charges, though some loans do not charge a fee for paying off a loan early. Your terms and conditions break down all potential charges.

Step 4: Apply for a personal loan

After deciding on a loan amount, comparing lenders, and picking the best loan for your needs, it’s time to fill out the full application. In some cases, the easiest way to apply may be through your lender’s website or mobile app.

Be prepared to enter basic personal information, including your contact information, Social Security number, employment information, and banking details.  Some loans may require a copy of your photo ID and other documentation to verify your employment or income.

When you complete the formal application, you’ll usually have to agree to a hard inquiry of your credit, which can lower your credit score by a few points temporarily.

Documentation required for a personal loan

Most lenders will require these documents along with your loan application for approval:

• Personal identification: A government-issued identification, such as a driver’s license or passport, helps verify your identity and meet government requirements for financial companies.
• Proof of income: Tax returns and pay stubs are commonly used to verify income. Bank statements and Social Security benefit statements may also be needed, depending on your income source.
• Proof of address: A utility bill, mortgage statement, or bank statement showing your full name and address proves your address. Some lenders require multiple documents to verify your address.

For online submissions, ensure that you use a secure method to submit documents. Many lenders offer a secure online portal that uses the latest online security standards to encrypt your data. Sending personal information over a public wireless network puts your data at risk.

Credit and income requirements

As part of reviewing your application, lenders review your credit, income, and other factors. Minimums vary by lender, and in some cases, a strong result in one area can offset weakness in another.

• Credit score: While every lender sets its own minimum credit score for personal loans, many lenders require a credit score around 610 for a personal loan, though some lenders will consider applicants with scores of about 580.
• Debt-to-income ratio (DTI): Lenders use DTI to assess your ability to repay a loan based on your income and all other loans. Lenders often look for a DTI of less than 36%, with 28% or less of income allocated to mortgage or rent payments.

Combining these metrics with your application and documentation, the lender can decide if they think you’re able to repay the loan or if your profile is too risky at this time.

Step 5: Get approved and receive your funds

Most personal loan approvals are fairly fast. In some cases, you could get an instant decision online, but you’ll usually have to wait one to ten business days for a formal decision. However, in some cases, it can take several weeks to review all documentation and make a final decision.

Rocket Loans offers same-day funding, meaning applicants can receive their money on the same day they are approved, in many cases.¹

Once you receive the funds, ensure that you allocate and use them as planned and budget carefully for repayment. Most lenders allow you to set up automatic repayments, which help you avoid late payment fees and damage to your credit from missed payments.

The bottom line: Borrowers have options when they need a $7,500 personal loan

If you want to borrow $7,500, you have several options to move forward. For the best experience, you may want to start by reviewing and optimizing your credit and debt-to-income ratio. Then you can shop around to compare lenders, explore loan options, and find the best loan for your unique financial goals.

If you’re ready to see what you may qualify for, you can start your application with Rocket Loans today.

¹ Same Day Funding available for clients completing the loan process and signing the Promissory Note by 4:00PM ET on a business day. Also note, the ACH credit will be submitted to your bank the same business day. This may result in same day funding, but results may vary and your bank may have rules that limit our ability to credit your account. We are not responsible for delays which may occur due to incorrect routing number, account number, or errors of your financial institution.