How Much Can I Get From A Personal Loan?
Sometimes you need more cash than you have for planned or unplanned expenses, and that’s when a loan can come in handy. A personal loan can cover a broad range of expenses, but the amount of money you can borrow and the terms to repay the loan are typically based on your current finances.
This article can give you a better idea of how much you can get when you take out a personal loan, and educate you on the factors that go into that amount.
What Is A Common Range For Personal Loan Amounts?
In general, most lenders allow borrowers to take out $1,000 – $50,000. The amount you’re approved for, however, can depend on certain factors in your finances.
Rocket Loans offers personal loans from $2,000 – $45,000.
What Is The Maximum Amount You Can Get With A Personal Loan?
Although it’s a rare occurrence, the highest amount approved for a personal loan is generally $100,000, but that’s under certain circumstances.
What Factors Determine How Much Personal Loan You Can Get?
As mentioned above, your loan amount can be influenced by factors related to your financial situation. These factors can include:
How much you earn can play a huge role in how much you can afford to borrow. Many lenders will require you to provide them with your annual salary so that they can have an idea of whether you can comfortably handle your monthly payments. Lenders can deduce this by looking at your debt-to-income ratio (DTI), the percentage of which can determine your ability to make your monthly payments.
When it comes to DTI, a lower percentage is preferred. Anything above 36% could seriously hurt your chances of qualifying for a loan.
Your Credit Score
Your credit score shows a lender how reliable you are at paying off debt. Think of it like a grade in school – the higher the score, the better off you’ll be. Borrowers with high credit scores and excellent credit histories are seen as less risky by lenders. Your interest rate is also dependent on your credit, and a higher score can net you lower rates.
The generally accepted score for a personal loan is 650 or higher, so if you have bad credit and need a loan, take some steps to improve your credit.
Getting A Secured Or Unsecured Loan
Most personal loans are unsecured, and your creditworthiness is judged primarily on your credit score and DTI. If those numbers aren’t favorable enough to get you the amount you need, you could potentially get more cash by putting up an asset as collateral.
A secured loan could offer you a higher loan amount, but you may risk losing your collateral if you fail to make your monthly payments.
Having A Cosigner
A cosigner is someone you know with good-to-excellent credit and income who applies for a loan with you, and who is financially responsible by law to repay the loan should you default on it. Having a cosigner for your loan can assure a lender that the loan will be repaid one way or another, which could get you a higher loan amount.
If you’re considering being someone’s cosigner, be sure to consider all of the possibilities before cosigning a loan. You could be risking your own finances if the borrower falls behind on their payments.
Calculating How Much You Can Borrow
You can get an estimate for how much you can borrow by calculating your interest rate and loan term against your desired amount. Current rates range between 6% and 36% for personal loans.
Try it out on our personal loan calculator and see what your monthly payments could look like. How much you can afford per month can inform you of the loan amount you could borrow on your budget.
How much money you can borrow with a personal loan can depend on your income, credit and other additional factors. You can calculate an estimate based on potential rates and terms, but really the best way to know what you can borrow is to get preapproved with a lender.
Looking for a preapproval? Get started with a quote from Rocket Loans®.
Table of Contents
Understanding Different Types Of Personal Loans
Personal loans can be your ticket to a secure financial future or to ending debt. Find out the types of personal loans you should go for.
Credit Scores For Personal Loans: What You Need To Know
Wondering what credit score you need for a personal loan? Read our article for a background on good credit and the effects of credit on personal loan approval.