How to get a $35,000 personal loan for debt consolidation

If you’re feeling weighed down by high-interest credit card debt, you’re not alone. Managing multiple cards with different due dates and interest rates can limit progress toward paying off your debt.

If you find yourself in this situation, a $35,000 personal loan could help you take control of the problem. By consolidating your debt, you can lower your interest rate and have just one predictable monthly payment to manage. That means more money is allocated toward your principal balance, allowing you to pay down your debt more quickly.

Key Takeaways:

• You can use a $35K personal loan to combine multiple credit card balances into a single monthly payment with lower interest rates.
• Your credit score plays a significant role in the interest rates and terms you qualify for on a personal loan.
• If a personal loan isn’t the best solution, you can consider alternatives like a home equity loan, HELOC, cash-out refinance, or 401(k) loan.

Which lenders offer $35,000 personal loans?

There are several options to explore to get a personal loan for $35,000. These loans may be available through online lenders, credit unions, banks, and other financial institutions.

Online lenders often are the fastest option. Many offer same-day or next-day funding, once the loan is approved. Rocket Loans℠ offers personal loans ranging from $2,000 to $45,000. You can use our personal loan calculator to estimate the payment for various loan amounts, terms, and credit score ranges.

Credit unions may offer competitive interest rates to their members, while banks may be a good option for borrowers who prefer in-person services.

Comparing lenders based on their loan amounts, interest rates, and repayment terms can help you find the best fit for your situation.

Understanding debt consolidation benefits

Debt consolidation can make your monthly payments more manageable. By combining multiple high-interest credit cards, you can significantly reduce your total monthly payment. It also allows you to make just one payment each month instead of managing multiple balances.

Using a personal loan for debt consolidation can also help you pay off high-interest credit card balances once and for all. That means less of your money is going toward interest, and you’ll make more progress toward reducing your overall debt.

The first step is to compare the monthly cost of your current debts with the monthly payment on a consolidation loan. A lower combined payment could free up room in your budget, but make sure the loan’s interest rate and repayment term still help you save money in the long run.

Calculate monthly high-interest debt payments

Before applying for a $35,000 personal loan, it’s important to understand how much you currently owe and how much those debts cost you each month. Start by reviewing your budget and listing every account, including credit cards, personal loans, student loans, auto loans, and store cards.

Add up the minimum monthly payments for each balance to determine how much your debt is costing you each month. Then, calculate your total outstanding balances to determine the overall amount you owe.

This exercise helps you understand where your money is going and whether a debt consolidation loan could lower your monthly payments or save you money on interest. It can also confirm that a $35,000 personal loan is enough to pay off all your high-interest debt.

Compare personal loan interest rates

Once you understand how much you're paying toward high-interest debt each month, the next step is to compare personal loan options. Each lender has different rates, terms, and eligibility requirements, so comparing multiple quotes will help you find the best fit for your needs.

Start by getting prequalified with at least three different lenders. Prequalification provides an estimate of the loan amount and interest rate you may qualify for, without affecting your credit score. That's because prequalification involves a soft pull on your credit report, not a hard inquiry.

Once you get closer to deciding on how much you want to borrow and which lenders you want to work with, you can apply for preapproval. This is a more formal review of your finances and may require a hard credit check, which can reduce your credit score a few points.

Neither prequalification nor preapproval guarantees you'll be approved for the loan you're applying for. It's a helpful way to understand how much you may be able to borrow before submitting your official application.

How credit scores affect debt consolidation loans

Your credit score plays a significant role in whether you're approved for a debt consolidation loan and the interest rate you receive. Most lenders want a minimum credit score of 580 to qualify for a personal loan, but a score of 700 or higher will get you better loan terms.

Before applying, take time to review your credit report from the three major bureaus and look for any errors. You can request a free copy of your report at AnnualCreditReport.com. Many financial institutions and credit card companies also provide free access to your score.

Steps to apply for a personal loan

Once you’ve decided that a $35,000 personal loan could help you consolidate your debt and lower your monthly payments, you’re ready to move forward with the application process. Understanding how the personal loan process works can make the experience easier.¹

Step 1: Compare lender rates and terms

Start by reviewing the rates and terms you received during prequalification, but don't focus solely on the interest rate. It's essential to review all potential costs, including origination fees and any other hidden expenses.

An origination fee is a one-time charge that most lenders impose to process your loan application. It typically costs between 0.5% and 8% of the loan amount and is deducted from your total loan proceeds. For a $35,000 loan, your origination fee could range from $175 to $2,800.

Your repayment terms also affect the loan costs. A longer loan term can lower your monthly payments, but it may come with a higher interest rate and result in more interest being paid over the life of the loan.

Step 2: Complete the loan application

Next, it's time to complete the formal loan application. As you fill it out, ensure each section is accurate, as incomplete information can delay the approval process. When you’re done, double-check your application to ensure everything is correct before submitting it.

Step 3: Submit required documents

Most lenders will ask you to submit the documents that verify your identity and finances with your loan application. Common documents include:

• A form of personal identification, like a driver’s license or passport
• Proof of income, which could include pay stubs, bank statements, tax returns, or a Social Security benefits statement
• Proof of address from a utility bill, mortgage statement, or bank statement

Your lender should provide a secure online portal for uploading documents. Always avoid sending personal information over public Wi-Fi networks, as they are more vulnerable to security risks.

During this stage, the lender will review your credit and calculate your debt-to-income (DTI) ratio, which represents the percentage of your monthly income that is allocated to debt payments. Lenders typically look for a DTI of less than 36%, though some lenders allow a higher ratio.

Step 4: Get approved and receive loan funds

Most personal loan approvals happen quickly, and many borrowers receive a decision within one to three business days. Some applications may take longer if the lender needs additional documentation. Rocket Loans offers same-day funding, which means you could receive the funds the same day you’re approved.²

Step 5: Budget monthly loan payments

Once you receive the funds, you can pay off your high-interest balances. Take time to budget for your new loan payment so you stay on track each month. Setting up AutoPay through your lender or bank can help you avoid missed payments.³

Alternatives to $35,000 personal loans for debt consolidation

Some borrowers may realize that a personal loan isn’t the best solution for consolidating their debt. Depending on your financial situation and assets, there may be other options to consider.

Home equity loan

Home equity loans typically come with lower interest rates than personal loans because your home serves as collateral. However, this means that if you fall behind on your loan payments, your lender may foreclose on your home.

Most lenders want you to have at least 20% equity in your home to qualify for a home equity loan. A home equity loan is considered a second mortgage, so you’ll make two monthly payments – one for your original mortgage and one for the home equity loan.

Home equity line of credit (HELOC)

A HELOC is a revolving line of credit secured by your home equity. Like a home equity loan, your property serves as collateral, which means your lender could foreclose if you fall behind on your payments. You’ll generally need at least 20% equity in your home to qualify.

With a HELOC, you can borrow as much or as little as you need up to your approved credit limit. You’ll have access to these funds during the draw period, which varies by lender. Once the draw period ends, repayment begins.

HELOCs often come with longer repayment terms than personal loans. They are second mortgages, which means you'll make a separate monthly payment in addition to your regular mortgage.

Rocket Mortgage does not currently offer HELOCs, but understanding how they work can help you evaluate all your debt consolidation options.⁴

Personal line of credit

A personal line of credit is a revolving line of credit, which means you can borrow up to a specific limit and repay only what you use, similar to how a credit card works. As you make payments, your available credit replenishes, giving you continued access to funds when you need them.

Unlike a HELOC, a personal line of credit is unsecured, so it doesn't require collateral, such as your home, vehicle, or investment accounts. This can make it a convenient choice for individuals who don't want to risk their home to secure their loan.

Cash-out refinance

A cash-out refinance allows homeowners to refinance their mortgage for more than they currently owe and receive the difference in cash.⁵ You can use those funds to pay off high-interest debt, make home improvements, or cover other major expenses.

The benefit of a cash-out refinance is that you'll have just one monthly mortgage payment. The cash you receive is factored into your new mortgage balance, and your total monthly payment is adjusted to reflect the refinanced amount.

401(K) loan

Borrowing funds from your 401(K) can provide quick access to cash. Many plans allow you to take a loan of up to 50% of your balance (or $50,000, whichever is less) within 12 months. You'll repay the loan with interest, but that interest is reinvested in your own retirement account, rather than being sent to a bank or lender. This makes a 401(K) loan different from an early withdrawal, which can trigger tax penalties and fees.

However, every 401(k) plan has its own rules, so it's essential to consult with your plan administrator before proceeding. They can help you understand repayment terms and potential impacts on your retirement savings.

The bottom line: Assess finances when considering a $35,000 personal loan for debt consolidation

Using a personal loan for debt consolidation can simplify your monthly payments and help you save on interest charges. It can also help reduce financial stress by giving you a clearer plan for paying off your debt.

If you’re ready to explore your options, consider checking your loan offers with Rocket Loans. You can get prequalified in minutes without affecting your credit score and see what loan terms may fit your financial goals.

¹All personal loans are made by Cross River Bank, a New Jersey state chartered commercial bank, Member FDIC, Equal Housing Lender. All loans are unsecured, fully amortizing personal loans. Eligibility for a loan is not guaranteed. This is not a deposit product. Please refer to our Disclosures and Licenses page for state-required disclosures, licenses, and lending restrictions.

Borrower must be a U.S. citizen or permanent U.S. resident alien at least 18 years of age. All loan applications are subject to credit review and approval. Offered loan terms depend upon your credit profile, requested amount, requested loan term, credit usage, credit history and other factors. Not all borrowers receive the lowest interest rate. To qualify for the lowest rate, you must have excellent credit, meet certain conditions, and select autopay. Rates and Terms are subject to change at any time without notice.

Please refer to our Terms of Use and please refer to Rocket Loans’ Privacy Notice and Cross River’s Privacy Notice to learn more about what we do with your personal information.

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²Same 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.

³Autopay must be selected as your repayment method at the time your loan closes in order to receive the rate discount. Discount cannot be retroactively applied to previously closed loans.

⁴Rocket Mortgage, LLC, Rocket Homes Real Estate LLC, Rocket Card, LLC, RockLoans Marketplace LLC (doing business as Rocket Loans), and Rocket Money, Inc., are separate operating subsidiaries of Rocket Limited Partnership. Redfin Corporation is an affiliated business of Rocket Limited Partnership. Each company is a separate legal entity operated and managed through its own management and governance structure. Rocket Limited Partnership is an indirect, wholly owned subsidiary of Rocket Companies, Inc. (NYSE: RKT).

⁵Refinancing may increase finance charges over the life of the loan.

Rocket Mortgage is a trademark of Rocket Mortgage, LLC or its affiliates.