How To Get a $5,000 Personal Loan

More than 40% of U.S. adults have less than $5,000 in savings, according to recent data from YouGov. That means many of us can't afford to pay a $5,000 unexpected expense with cash — like a large medical bill or home repair. Building an emergency fund should always be a priority, but a personal loan can be a lifeline if you don’t have one yet. 

Personal loans have lower interest rates than credit cards on average, according to the Federal Reserve. It's also easy to apply for a personal loan online, and you can typically get the cash within a few days. We'll provide some tips on where to get a $5,000 personal loan, help you compare your options, and guide you through the application process.

Compare personal loan rates

Where can I get a $5,000 personal loan?

You have a few options. Depending on your credit score and preferences, one may be a better fit than the others. 

Online lenders

Online lenders are typically non-bank lenders that don't offer deposit accounts. Since they don't pay overhead to operate brick-and-mortar branches, they can often pass along the savings to borrowers in the form of lower interest rates. Other benefits can include an all-digital application process and fast funding. 

Online-only lenders may have less stringent credit requirements than banks, but they don't offer in-person support like banks and credit unions. 

Banks

When you apply for a personal loan from a bank, you can often visit a branch to get help from a loan officer. Banks tend to cap APRs around 25%, a lower maximum than many online lenders. Banks also offer a range of other financial products, like checking and savings accounts, and some banks offer rate discounts on personal loans for existing account holders. 

“Banks can be a good option if you already have a personal relationship with your local bank, but they do tend to be stricter and have a few more requirements you may need to clear,” says Mike Kern, CPA, founder of FreeBudget. 

Credit unions

Credit unions are member-owned, not-for-profit financial institutions that offer many of the same services as banks, including personal loans. Some credit unions restrict membership to certain groups or geographical areas, but some are open to anyone. 

Credit union interest rates on personal loans are capped at 18%, and they charge lower average interest rates than banks. Credit unions are also more likely to work with people with bad credit or a limited credit history.

Compare: Credit Union vs. Bank: Which Is Right for You?

Common purposes for $5,000 personal loans

Here are some of the most common uses for personal loans in the $5,000 range, according to Credible loan data from June 2024 to May 2025:

• Debt consolidation
• Credit card refinancing
• Major purchase
• Bills or rent
• Home improvement
• Special occasion
• Medical expenses
• Car repair

You can use a personal loan for many kinds of expenses or situations. Common loan purposes also include vacations and travel, weddings, moving, and adoptions.  

How to compare $5K personal loans

When comparing personal loans, consider the following factors.

The cost of borrowing (APR)

Personal loans typically charge an annual percentage rate, or APR. APR represents the loan's annual cost, including the interest rate plus any upfront lender fees. Personal loan APRs generally range from 6.49% to 35.99%, but the rate you qualify for can vary depending on the lender, the type and size of the loan, your repayment term, and your credit profile.

Comparing APRs among different loans and lenders helps you estimate the total cost of borrowing. Most lenders allow you to prequalify to get a personalized rate estimate without impacting your credit.

“This makes it relatively easy to find the best rate, although there are no guarantees that a particular consumer will qualify for a particular rate,” says Michael Sullivan, personal finance consultant at Take Charge America. “The best rates are usually reserved for consumers with the best credit rating.”

Compare: APR vs. Interest Rate on a Personal Loan: What To Know 

Fees

Many lenders charge an origination fee that covers the cost of issuing the loan and offsets the lender’s risk. Origination fees can range from less than 1% to as much as 12% of the amount you're borrowing, and they're typically deducted upfront from the loan. However, some lenders offer personal loans with no origination fee. 

You may also pay incidental fees such as late payment fees or returned check fees. Your loan agreement will list any fees you may be responsible for, as required by the Truth in Lending Act. 

Repayment terms and monthly payments

Personal loan repayment terms typically range from two to seven years. “A longer term means lower monthly payments, but more interest paid over time,” says Kern. “If you can afford it, a shorter term may save you hundreds or even thousands of dollars.” 

Choose a personal loan with an affordable monthly payment that won't put a strain on your budget while also limiting your total interest costs. 

Most personal loan lenders don't charge prepayment penalties, so you'll also have the option to repay your loan early and save money on interest.

Check Out: How to Create a Budget: A Step-By-Step Guide

Total repayment costs

You should also calculate the total cost of repayment for each personal loan you're considering. A loan with a low APR or low monthly payment may still be costly if it has a long repayment term. It's important to understand how much you'll spend over time to borrow the money. 

What is the cost to repay a $5,000 loan?

The cost to repay a $5,000 loan depends on the APR and repayment term. Use a personal loan calculator to determine the total cost based on those variables. The table below shows a few examples. As you can see, a high APR combined with a five-year term can make repayment very expensive even though the monthly payment is low.

How to get a $5K personal loan

1. Review your credit score and credit report: Many lenders have minimum credit score requirements. Check your credit score to get an idea of which lenders you might qualify for. Also, check your credit report at AnnualCreditReport.com to see if it has errors or outdated information that might be hurting your credit score.
2. Check your debt-to-income ratio (DTI): Personal loan lenders typically prefer a DTI below 36%. Calculate your DTI by adding up your minimum monthly debt payments (credit cards, existing loans, and so on) and dividing the total by your gross monthly income. Then multiply the result by 100 to get a percentage.
3. Research and compare lenders: Look for lenders that serve borrowers in your credit score range and offer $5,000 personal loans. Note that some lenders also have minimum income requirements. Read customer reviews on the Better Business Bureau website and Trustpilot.
4. Prequalify with multiple lenders: For lenders that allow you to check rate quotes with a soft credit check, go through the prequalification process and compare estimates. 
5. Prepare documentation: Gather documents that prove your identity, income, and address. For example, you may need to upload your driver's license and tax return. 
6. Choose a lender and apply: “The best option is usually the one that's the safest and offers the lowest APR or interest rate,” says Sullivan, but make sure the monthly payment fits your budget as well. Continue with the formal application, which typically requires a hard credit inquiry that could cause a slight, temporary dip in your credit score.
7. Review terms, sign, and begin repayment: If you're approved, review your loan agreement carefully, checking for hidden fees or loan use restrictions. If you're happy with the final rate, sign your loan documents and wait for the money to arrive in your bank account. Some debt consolidation loans provide the option of sending the loan proceeds directly to your creditors, plus a small rate discount.

Alternatives to a $5,000 loan

If a personal loan isn't the right fit for your needs, the options below are safe alternatives. “Most other forms of borrowing, such as credit card advances, cash advances, payday loans, and auto title loans, are actually much worse than personal loans,” says Sullivan. 

Credit counseling

If you're taking out a $5,000 loan to pay off credit card debt, credit counseling may be a better option. A nonprofit credit counseling agency can enroll you in a debt management plan, possibly reducing the interest rate on your debt and lowering your monthly payment. Credit counseling can also help you develop better budgeting and spending habits to stay out of debt in the future. 

0% APR credit cards

Some credit card issuers offer zero-interest promotional periods, allowing you to avoid paying interest on a $5,000 expense for up to 21 months when you open a new card. However, the card's regular APR takes effect after the introductory period ends, so you should consider other options if you need a longer repayment window.

Compare: Personal Loan vs. 0% APR Credit Card

Personal line of credit

Some banks and credit unions offer personal lines of credit (PLOCs) that you can borrow against on an ongoing basis, much like a credit card. These may come with fees, however, and they typically have variable APRs rather than fixed APRs, unlike personal loans. 

401(k) loan or withdrawal

You may qualify for a hardship withdrawal from your retirement account. You can avoid the tax penalty if you use the cash to meet an urgent financial need, like a medical expense. If your plan sponsor allows, you could also take a loan from your 401(k) account and repay it with interest. A 401(k) loan doesn't require a credit check.

Compare: 401(k) Loan vs. Personal Loan: Which Is Better? 

Family loan

“Loans from family and friends may be less expensive and less damaging to credit ratings, even if they do pose relationship risks,” says Sullivan. Online family loan platforms like Namma and Pigeon can make loans between loved ones easier to manage.

Disclosure: Some lending partners that participate in Credible’s comparison marketplace offer loans to borrowers with scores as low as 550. Borrowers with low scores will have fewer lending options than borrowers with higher credit scores.