Getting a $30,000 loan: Everything you should know

Need $30,000 to pay for a kitchen renovation or consolidate debt? A personal loan might be a good option.

You can use the funds from a personal loan however you want. And some providers of personal loans don’t charge origination fees, late payments, or prepayment penalties, making these loans a solid choice if you need a large chunk of money.

We’ll explain the basics of these loans and why they might be the right choice for you.

Where to find a $30,000 loan

You have plenty of options when you’re shopping for a personal loan. Banks, credit unions, private lenders, and online lenders all offer these products.

Shopping around is important. Different lenders have different requirements. Some will require higher credit scores and lower debt-to-income ratios than others. Others will charge different fees and interest rates, while some will charge no fees at all. Before signing up for a personal loan, make sure to shop for lenders offering the best deals and terms.

As an example, you can borrow from $2,000 through $45,000 with Rocket Loans℠. Our loans offer 36- or 60-month repayment periods, while your loan’s APR will depend on the strength of your credit and finances.

Requirements for a $30,000 personal loan

The requirements for a $30,000 loan will vary by lender, but most will consider things typically used to determine whether a borrower is a good credit risk, such as:

• Credit score/creditworthiness: Lenders will usually check your three-digit credit score when you apply for a personal loan. It varies, but lenders like to see a good credit score of 670 or higher, though many lenders will consider those in the range of 610 to 640. The higher your score, the lower your interest rate will typically be.
• Debt-to-income ratio: Your debt-to-income (DTI) ratio measures how much of your gross monthly income is eaten up by certain recurring monthly payments. Lenders typically consider your monthly mortgage or rent payments; student, auto, and other personal loan payments; and minimum credit card payments when calculating your DTI for a personal loan. Most lenders prefer that these monthly payments equal no more than 36% of your gross monthly income, your income before taxes are taken out.
• Income stability: Lenders want to make sure that you have a stable and predictable income, which makes it less likely that you’ll fall behind on your loan payments. You might have to provide your lender with copies of your most recent paycheck stubs or copies of your online bank account statements to prove that your income is steady and high enough to cover your new loan payments.
• Age: You’ll need to be at least 18 to qualify for a personal loan.

Monthly payment for a $30,000 loan

The amount you’ll pay each month for a $30,000 personal loan depends on its interest rate and term. The higher your interest rate and the shorter your term, the higher your monthly payment will be.

While your monthly payment will be smaller with a longer-term loan, you’ll also pay more in interest and more overall for your loan the longer you take to repay it.

You’ll need to determine whether it’s more important to have the lowest monthly payment or to pay the least amount of interest.

You can use Rocket’s simple loan calculator to help determine how much you’ll pay each month depending on what you borrow, your loan’s term, and your interest rate.

Pros and cons of $30,000 loans

As with all financial products, personal loans come with their own pros and cons. It’s important to weigh the positives and negatives before you apply for a personal loan.

Pros

• Applying for a personal loan is fast and simple. It varies, but your lender might approve your request for a personal loan on the same day on which you apply. Your lender might then deposit your funds in your checking account on the same day that it approves your loan.
• A personal loan that’s paid on time can improve your credit score. Your lender reports your personal loan payments to the three national credit bureaus. If you build a history of on-time payments, you can steadily improve your credit score.
• Personal loans offer a fixed-rate payment. A fixed interest rate means that your monthly payment will not change during the life of your personal loan. This makes it easier to budget for your monthly payments.
• Many personal loans are unsecured. Your mortgage loan is a secured loan, with your home acting as collateral. Your lender can take your home if you fail to make your payments on time. Many personal loans are unsecured, requiring no collateral. If you fall behind on the payments with an unsecured personal loan, your lender won’t be able to take your home, car, or other assets, making these loans less of a risk for you.

Cons

• You could face a higher interest rate if your credit score is low. If your credit score is low, the odds are high that your lender will charge a higher interest rate. Depending on your score, you could face interest rates of 20% or higher, making it more expensive to borrow money.
• Personal loans might include origination fees. Some lenders charge origination fees for personal loans. These fees vary but can range from 1% to 10% of your total loan amount, depending on lender. If you are borrowing $30,000, you can expect to pay an origination fee of $300 to $3,000, which many lenders will remove from your loan funds. You can also shop around for lenders that don’t charge these fees.
• Missed or late payments can hurt your credit score. If you make a personal loan payment 30 days or more late your lender will report it to the credit bureaus. This will cause your credit score to drop.
• Interest for personal loans begins to accrue immediately. Your personal loan interest will begin to accrue as soon as you receive the funds from your loan closing.

How to get a $30,000 loan

Applying for a $30,000 personal loan isn’t overly complicated. Here are the steps to take:

1. Determine if you really need a loan: You can do many things with a personal loan, but you should only borrow money if you absolutely need to. Do you need to pay for a new hot water heater or furnace? A personal loan could be a better option than using a high-interest-rate credit card to pay for this repair. Want to take a vacation? It’s better to save enough money to pay for your trip than to take out a personal loan to cover the costs.
2. Review your credit report and credit score: Lenders will look at your credit reports and credit score when determining if you are qualified for a personal loan and at what interest rate. Before applying, then, you should look at your reports and score, too, to better understand what kind of rate you might get with your personal loan. You can order free copies of your three credit reports from Experian, Equifax, and TransUnion at AnnualCreditReport.com. These reports will list any recent late payments and how much you owe on your credit cards and loans. You can order your credit score from FICO.com.
3. Get pre-qualified with several lenders: The best way to nab the lowest interest rate and fees with your personal loan is to get pre-qualified with several lenders. During this process, lenders will check your credit and verify your income. They’ll then give you an offer. If you get enough offers, you can compare rates and fees and choose the most affordable personal loan or the loan with the best terms. Lenders perform a soft credit check when they pre-qualify borrowers. This means that shopping around won’t hurt your credit score.
4. Decide on a lender: Choose a lender that you are most comfortable with. Before you apply for a personal loan with that lender, gather the documents you’ll need to prove your income and debts. This could include copies of your most recent paycheck stubs, tax returns, bank account statements, and W-2 forms. Decide, too, what type of personal loan you’d like, a secured loan backed by collateral or an unsecured personal loan.
5. Apply for your loan: You can often apply for a personal loan online by filling out a lender’s online application form. You might also be able to send documents confirming your income and personal information to your lender by email or by downloading them and sending them through an online lending portal. An online lender might approve your loan on the day you apply. Banks or credit unions might take longer, often deciding within one to five days of your application.
6. Get your money: Once your lender approves your application, it will send your funds in a single lump sum. Your money might be deposited in your bank account or sent to you as a paper check. How fast you receive your money varies by lender, but some online lenders can deposit your funds in your account on the same day that they approve your loan. You can use the money from a personal loan however you’d like.
7. Begin repaying your loan: You’ll repay what you borrow in monthly payments. How long it takes to repay your loan, and how much you pay each month, depends on your loan term and interest rate. If you took out a 24-month loan, it would take you two years to pay back what you borrowed. A 60-month loan will take five years to repay. You might consider setting up automatic payments so that you don’t forget to make a payment on time. 

Alternatives to a $30,000 personal loan

If you’ve built equity in your home, home equity loans and home equity lines of credit, better known as HELOCs, are good alternatives to a $30,000 personal loan. These two equity products typically come with lower interest rates than personal loans.

Apply for a home equity loan or HELOC

Home equity loans: Equity is the difference between what you owe on your mortgage and how much your home is worth. If your home is worth $400,000 and you owe $250,000 on your mortgage, you’ll have $150,000 in equity. With a home equity loan, you can borrow a portion of that equity, often up to 80%. For $150,000 in equity, then, you might qualify for a home equity loan up to $120,000.

If you take out a home equity loan for $30,000, you’d receive that money in a single payment. You can spend that money however you’d like, though if you use it for home improvements that increase the value of your home, you can write off the interest that you pay on your loan on your taxes.

Like with a personal loan, you pay back what you owe with interest with regular monthly payments. How much you pay each month depends on your loan’s term and interest rate. This is a secured loan, with your home acting as collateral. If you miss your payments, your lender could take possession of your home.

HELOC: A HELOC acts like a credit card with a credit limit based on your equity. With a HELOC, you only pay back what you borrow. If you qualify for a HELOC with a credit limit of $30,000 but you only borrow $25,000, that’s all you’d pay back once your HELOC enters its repayment period.

FAQ

Questions about how a personal loan works? Here are answers to some of the most common.

How hard is it to get a $30,000 personal loan?

Because $30,000 is a large amount some lenders have strict eligibility requirements for loan applicants. This could mean needing a credit score of 650 or higher and a DTI at or below 36%.

How long would it take to pay off a $30,000 loan?

This depends on your designated loan term. Personal loan repayment periods can last 12 to 60 months, and your fixed monthly payments (including interest) will be measured out to align with the length of your term. If you’re hoping to pay off a personal loan early, make sure your contract doesn’t include a prepayment penalty.

What’s the best place to get a personal loan?

Your personal bank or credit union could offer you a special deal if you’re a long-time customer. Otherwise, shop around to find the lender that can offer you the best interest rate and repayment term for your needs. You can also work with a lending platform such as Rocket Loans to come up with a loan that’ll work well for you.

Could I get a $30,000 personal loan with no credit?

Qualifying for a $30,000 loan would typically require having good to excellent credit, but it may in some cases be possible to get a loan with no credit history. For example, your personal bank or credit union might have special considerations for long-time customers, or you might opt for a secured loan (with less strict credit requirements) or ask someone to co-sign the loan with you.

The bottom line: Weigh your options when you need a $30,000 loan

If you need $30,000 to pay for home improvements, pay off credit card debt, repair your car, or tackle any other financial emergency, a personal loan can be a good choice. It’s important to shop around with different lenders to find the lowest interest rates and fees and best terms. Remember, too, that while making your personal loan payments on time will help your credit score, paying them late will cause your score to drop. Make sure that you can afford the monthly payment that comes with your loan.

If you’re ready to apply for a personal loan, reach out to Rocket Loans℠.