If you need a $2,000 personal loan, a $4,000 loan, where can you go? If you’re wondering how to get a $10,000 loan, you’ve come to the right place.
Many of us have taken advantage of a personal loan, either for emergency expenses, a big event or through our student loans. Personal loans are typically unsecured and non-revolving.
When deciding on the best personal loan for your situation, many factors come into play. For example, how much are you hoping to finance? Additionally, how large a payment can you reasonably afford within your budget? The length of prepayment can also vary, depending on the lending institution.
How much you can borrow, and the interest rates you will pay, will depend on your credit score. For those rebuilding their credit, the interest rates will be higher and the loan amounts might also be smaller initially. There are also institutions who will report your on-time payments, which helps you rebuild your credit.
How to get a loan
Here are some lending institutions and the limits on what they will lend.
Banks and credit unions. These institutions offer personal loans, along with checking, savings and other secured and unsecured loans. A personal loan may also be available through a line of credit, which can be revolving. The limits vary from institution to institution, but whether you are looking for a $2,000 personal loan, a $4,000 loan, or a $10,000 loan, banks and credit unions are often willing to accommodate you.
Wells Fargo, for example, says it will lend from $1,000 to $100,000. Most banks do not include a prepayment penalty, although there may be an origination fee. The interest rates are usually fixed and are often some of the lowest available, with a specific payment over the life of the loan. Another plus is that your personal bank may offer discounts based on your current relationship.
Payday loans. These loans are directly tied to your income. Thus, the loan amount could be higher based on your take home income every month. If you are looking for a $10,000 loan, you probably won’t have any luck with a payday lender. Generally, payday loans are capped at $1,000, but limits vary from state to state.
Interest rates on payday loans are significantly higher than other personal loans — it can work out to 400 percent annual interest. There are no interest reductions for early prepayment. The lending period is limited to the next payday, or no more than 30 days, but typically averages two weeks. These types of loans are usually considered an emergency option, but not a cheap way to reduce other debt.
Online loans. You can shop the websites of online lenders or brokers 24 hours a day, seven days a week. Brokers may have a group of lenders or investors who provide the funds. Whether you’re looking for a $2,000 loan or a $10,000 loan, you may be able to find it online.
An example is Prosper, which offers marketplace or peer-to-peer lending. According to the company’s website, Prosper offers fixed-rate, fully amortizing personal loans from $2,000 to $35,000, with terms of 3 or 5 years, depending on Prosper’s rating Loan terms of 3 and 5 years are available, depending on the loan amount and your “Prosper Rating” — an evaluation of how likely you are to repay the loan.
As would be expected, interest rates for borrowers with better credit can be significantly lower than those with poor credit. But borrowers who have been turned down by traditional lending institutions may have more luck getting approved by online lenders, who sometimes use alternative methods of evaluating borrower risk. While some will turn down those with bad credit scores, others are more open to lending to “risky” borrowers — for a price.
Online lenders will want to see proof of income, and perhaps length of employment. The APR can be high on smaller loans, but may be discounted for larger loans. The loan term is dependent upon the lender. There may also be prepayment penalties for early payoff of the loan.
With all of these loan options, the money is usually available to the borrower within 24 hours or less, by means of cash or direct deposit. It’s important to do your research to find the best interest rate and terms available based on your credit score and other factors as defined by the lender. For those rebuilding credit, try to find a personal loan that will report your timely payments and thus give your score a boost.
Tracy Sherwood-Knepple is a business and finance writer. She holds a degree in mass communications from Indiana University.