How To Get a $250K Loan

While home equity lines of credit (HELOCs) and home equity loans offer a way to borrow up to $250,000, the application process can be extensive, and you'll need to have sufficient equity to qualify. Personal loans, on the other hand, offer a much quicker way to get up to $250,000, without having to put your home on the line. The trick is to find a lender that offers them.

Where can I get a $250K personal loan?

Not many lenders offer $250,000 personal loans. Most personal loan lenders — whether online, a bank, or a credit union — cap loan amounts at $50,000 to $100,000. BHG Financial is one of the very few lenders, and possibly the only lender, that offers loans of up to $250,000 without requiring collateral.

Fortunately, there's no rule against taking out more than one personal loan. Other options include supplementing a $100k personal loan with other forms of borrowing, such as home equity loans, HELOCs, and credit cards.

Online lenders

Online lenders tend to have competitive rates, easy prequalification, and can often approve your application and fund your loan within days. BHG is the only lender we know of offering $250,000 personal loans.

But if you decide to use multiple forms of borrowing to meet your needs, a couple of others offer $100,000 loans. They include:

Banks

Many banks, such as Discover, Wells Fargo, Citi, and SoFi, offer personal loans, with notable exceptions like Chase Bank. However, it's more common for banks to require that you have an existing relationship before you can apply for a personal loan. Also, most banks don't offer unsecured loans for $250,000. Wells Fargo, SoFi, and USAA all offer unsecured loans up to $100,000.

However, if you have a savings account or CDs valued at $250,000 or more, you might be eligible for a savings-secured loan or a loan secured by your CDs. This can be a good way to qualify for a lower interest rate when you don't want to deplete your emergency fund and/or pay early withdrawal penalties.

Banks can be a great fit for borrowers who want to keep all of their accounts with one institution or prefer applying for a loan in person (with the exception of online-only banks like SoFi).

Check Out: Best Banks for Personal Loans

Credit unions

Credit unions tend to offer lower rates than banks. While they typically require new customers to sign up for a membership to get a loan, joining is a relatively quick and simple process (you can often roll it into your personal loan application).

Some credit unions may offer larger unsecured loan amounts, relative to banks and online lenders, as well. For instance, Navy Federal Credit Union offers loans up to $150k for home improvement. Alliant offers unsecured loans up to $100,000. More credit unions also tend to offer loans secured by your savings account or CD.

You'll find that some credit unions offer online applications like banks and online lenders do, too. Credit unions can be a good fit if you prefer to work with a brick-and-mortar lender (many credit unions have physical locations) and want competitive rates.

Your brokerage

Like a savings- or CD-secured loan, you may be eligible to borrow against non-retirement assets in your brokerage account. However, unlike unsecured and secured personal loans, brokerages typically extend a line of credit (as opposed to an installment loan) backed by your securities.

The main advantage is that you can borrow as needed. However, one drawback is that most lines of credit have variable rates — which could be risky if you need to budget carefully for repayment and don't want to risk rising costs.

In many cases, you'll need a minimum portfolio value to qualify, which could be more than the $250,000 you need to borrow.

How to compare $250,000 personal loans

Comparing your options for a $250,000 loan is an important step in the borrowing process because loans of this amount can have high borrowing costs. Small differences in interest rates and repayment terms can have a big impact on how much interest you'll pay and your monthly payment.

1. Interest rates and APR

Interest rates impact the total cost of your loan and your monthly payment. Generally speaking, you want to choose the loan with the lowest interest rate, because a lower interest rate means lower total borrowing costs and lower monthly payments.

This is an especially important consideration for a $250,000 personal loan, as a difference of even 1 percentage point can have a costly impact on the interest you pay over the life of the loan.

For example, a $250,000 loan paid back over 10 years at 18% will cost $290,556 in interest over the life of the loan. Raising the interest rate to 19% will add nearly $20,000 to your total loan cost and increase your monthly payment from $4,506 to $4,667.

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

2. Fees

The most common fees charged on personal loans are origination fees and late fees. Few, if any, lenders charge prepayment penalties.

• Origination fee: Some lenders charge an origination fee to cover the cost of processing your application or to offset their risk in lending to you. The fee is typically a percentage of the loan amount, and may be deducted upfront from the loan amount. For example, if you're borrowing $250,000 and your origination fee is 4%, you'd pay $10,000 upfront out of the loan proceeds and receive $240,000.
• Late fee: Some lenders assess a late fee to your next monthly payment if you don't make your monthly payment within a certain number of days of the due date (known as a grace period). Late fees typically range from a certain percentage of your unpaid monthly payment or a flat fee, such as $25, whichever is higher.
• Prepayment penalty: A prepayment penalty is a fee a lender charges if you pay your loan back early. These fees are uncommon.

3. Repayment terms

Your loan's repayment term is the length of time you pay back your loan. Most personal loans have repayment terms of two to seven years. However, a $250,000 loan with BHG could have a repayment term of up to 10 years. Some lenders may offer even longer repayment terms for home improvement loans.

The key thing to keep in mind is that longer repayment terms have higher total interest costs as well as lower monthly payments.

4. Monthly payment

As noted, the amount of your monthly payment is directly related to the repayment term you choose. As you compare $250,000 personal loan options, try to find a repayment term that keeps your payments affordable while reining in interest costs.

5. Total repayment costs

Your loan's total repayment cost includes, at minimum, the loan principal, upfront fees, and total interest payments. (Avoid late fees to limit additional costs.)

A high loan amount, such as $250,000, along with a relatively long repayment term like 10 years, could result in a total cost that exceeds the amount you borrow.

What is the cost to repay a 250K loan?

When you apply for a financial product of any kind, it's important to understand how much it will cost. Knowing that cost is even more important with a $250,000 loan.

Total costs for a $250,000 loan with a 10-year repayment term could look as follows at different rates:

• 12%: $180,413
• 15%: $234,005
• 20%: $329,767

Disclosure: Based on loans with 10-year repayment terms and no origination fees.

Here are more examples of what total costs could look like for a no-fee $250,000 personal loan at five different repayment terms (all are at 18% APR). Notice that the 10-year loan term costs almost $160,000 more than the five-year term.

Because $250,000 personal loans carry such high costs, whether you repay them over five years or 10, it's important to have a clear plan for how you'll use the funds. Brian Seymour II, founder of Prosperitage Wealth, warns to think carefully before proceeding.

“If it helps grow your net worth (e.g., consolidating high-interest debt), it might make sense,” he says. “But if it's covering overspending or short-term lifestyle costs, it could become a long-term burden. The bottom line is that a $250K personal loan is a big commitment. Make sure the return on that borrowed money justifies the cost and that you've properly evaluated the risks.”

How to get a $250,000 personal loan

While it doesn't take long to prequalify and apply for a loan, there are key steps you should follow to find the best rates and terms.

• Review your credit score and profile: Use a free service like Credible's free credit score tool and check your report (different from your score) at AnnualCreditReport.com. If you find errors, dispute them with the appropriate bureau before applying for a loan.
• Calculate your estimated monthly payments: Calculating your monthly payments before you prequalify and apply will help you understand how much loan you can afford based on your budget. Use a personal loan calculator to help.
• Research and compare lenders: When reviewing personal loan lenders, note any fees charged and what minimum credit score or minimum income may be required.
• Prequalify with multiple lenders: Getting prequalification quotes from more than one lender lets you compare rates, upfront fees, repayment terms, and monthly payments to find the best fit for your financial situation. Keep in mind that prequalification isn't an offer of credit. The rates and terms of a loan offer may differ.
• Prepare documentation and apply: Once you choose the best prequalification quote, take a moment to find out which documents your lender requires you to submit. Then, fill out a formal application.
• Review terms, sign, and begin repayment: If the lender approves your application, it will send a loan contract. Look over the details of the contract and double-check the terms of your loan. If you're satisfied with the offer, sign the contract. Your payments should begin the following month.

Alternatives to a 250K loan

The main alternatives to a $250,000 personal loan are HELOCs and home equity loans.

HELOC

A HELOC is a line of credit that lenders offer based on how much equity (home value minus your mortgage balance) you have in your home and several other factors. A HELOC usually has two phases: draw and repayment.

During your draw period, you can draw money from your HELOC up to your limit. You'll make interest-only monthly payments only on what you withdraw. When your draw period ends, your repayment period begins. During this phase, you'll pay back principal plus interest, which means your monthly payments will likely see a big jump.

Home equity loan

Home equity loans are similar to personal loans in that they're installment loans. You receive all your funds upfront and repay what you owe via a fixed interest rate and fixed monthly payment. However, rates tend to be much lower than personal loan rates because the loan is secured by your home. Because home equity loans have fixed monthly payments, they tend to be better for budgeters who prefer fixed costs.