So you need a $100,000 loan — but how can you get one with a low interest rate? And what should you watch out for with large loans?
You may have multiple five-figure debts that you want to consolidate into one monthly payment. Or maybe you just bought a fixer-upper home and want to take out a loan to make all the necessary renovations. When you’re looking to borrow $100,000, you’ll need a lender that offers larger personal loans.
Fortunately, there are solid options beyond your bank for large personal loans. Let our guide help you find a competitive lender that fits what you need to fund your next big expense or consolidate debt.
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6 steps get a personal loan of up to $100,000
- Research your options. It’s important to look at what different lenders have to offer to make sure you get the best loan for you. You may have less options since many personal loan lenders have lower maximum amount limits. But if you meet the eligibility criteria of the lender, you could get a low interest rate loan for $100,000.
- Know your credit score. Your credit score significantly affects the interest rate for most personal loans. Knowing where you stand before you apply will help you narrow down your options to loans you’re likely to be approved for.
- Keep your budget in mind. Take time to go over your income and expenses to learn just how much you can afford in monthly repayments. From there, you can find the most favorable terms for the amount you need within that limit.
- Ask questions. Before you apply or even after you’ve received an offer, don’t hesitate to ask questions. You can usually contact a lender over the phone or online via email or live chat.
- Assemble your paperwork. Learn what’s required by the lender beforehand, if possible. At a minimum, you’ll need your income information, government-issued ID such as a driver’s license or passport and your banking information.
- Apply online. If you’ve found a lender on finder.com, click the “Go to site” button to be taken to the application. Your full name and contact information, the amount you want and the purpose of the loan are typically required. You could get pre-approved soon after applying or you may have to wait a few days to a week for a final approval decision.
Which online providers offer $100,000 personal loans?
What will I need to apply for a $100,000 loan?
There’s always a level of financial scrutiny that you open yourself up to when applying for financing. The lender will probably look at:
- Reason for borrowing. What you’re using the loan for is a good indicator of risk for the lender. You could be considered less of a risk, and therefore have a stronger application, if the lender believes the reason is responsible. For example, a $100,000 personal loan to start a business may be viewed as more risky than a loan to make home renovations.
- Credit score. The APR you’re offered is affected by your credit score as well as your credit history in general. A $100,000 loan will likely require an even higher credit score than what the lender lists as its minimum requirement because it’s a large loan.
- Income and employment. It’s important to lenders that you’re able to afford all of your debt obligations, including your new loan if approved. You can demonstrate this ability with stable employment history and a high salary. The lender will ask for your annual income and recent employment on the loan application. In addition, the lender could evaluate your repayment ability by looking at your debt-to-income ratio, which is your monthly debt payments divided by your monthly income.
Some lenders summarize eligibility in three C's
- Character (aka creditworthiness). This encompasses your credit score and the information on your credit report such as payment history and open accounts.
- Capital (aka collateral). If you’re considering a secured personal loan, your collateral will be evaluated for value to be sure that the lender can recoup its losses in the event that you default.
- Capacity (aka ability to repay). The lender will look at how long you’ve been at factors such as your current job, your salary and debt-to-income ratio to determine your ability to repay the new loan and handle all your other financial obligations.
How much does a $100,000 loan cost?
The total cost of your loan will depend on the APR and loan term you’re offered. As previously mentioned, you could get a lower APR if you have a good to excellent credit score and established credit history.
Costs example: $100,000 loan with a 5-year term at 5.7% APR
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How to get a low interest rate and favorable terms
You have more control over the rate and terms on a loan than you might think. Start by being prepared and knowing what to expect. Here are three main points to understand:
- Fixed vs. variable interest rate. Is the interest rate set for the course of the loan or could it change? Fixed rates have the benefit of predictable monthly payments while variable rates often come with lower starting APRs but could increase later in the loan term. Learn more about the difference between fixed and variable rate personal loans.
- Your credit score. Is your credit score higher than the lender’s minimum requirement? Is your credit score in the good-to-excellent range needed to get the best rate? Don’t know what your credit score is? Find out your score.
- Your ability to repay the loan. Be sure to include all income and assets on your application to fully demonstrate you can afford the large monthly repayments that’ll come with a $100,000 loan.
- Loan amount. You may want to evaluate if you really need to borrow $100,000. If the debts you’re looking to consolidate amount to $86,000, for example, not borrowing that extra $14,000 could save you a lot of money on interest and possibly qualify you for a shorter loan term. A shorter repayment period means larger monthly payments but a lower overall cost due to less interest being charged over the loan term.
What can I do with a $100,000 loan?
When comparing loans of this amount, you likely have your borrowing reason in mind already. Here we highlight a few common expenses you could cover with a $100,000 loan.
- Consolidate large amounts of debt. Have you racked up a lot of high-interest debt that’s taking you longer than you’d like to pay back? A $100,000 loan could help you pay off that debt faster and save money on interest with one simple monthly payment.
- Grow or start a business. A personal loan for business use allows you to use the money for both business and personal expenses and deduct interest on your taxes as applicable, while a business loan can only be used for eligible business expenses.
- Improve your home. Whether you’re improving your home because of a necessary repair or aesthetic remodeling, you could use a home improvement personal loan to pay for the expenses upfront. You could also consider a HELOC (home equity line of credit) or home equity loan if you have enough equity in your home.
- Find out what else you can use a personal loan for. Learn about common uses for personal loans and which lenders specialize in different loan purposes.
What to watch out for
- The fine print. Be sure to read the terms and conditions of the loan agreement. Ask questions if you don’t understand something. You’ll want to know about prepayment options, penalties, privacy policies and your rights as a borrower.
- Additional costs. Consider any fees or charges beyond the interest rate. Upfront fees for things like loan origination costs are usually included in the APR (annual percentage rate). Keep a lookout for penalty fees for things like early repayment or late payments — these penalty fees aren’t usually included in the APR but could be costly.
- Other borrowing options. If you don’t find a personal loan offer that suits your needs, you have other borrowing options. Compare alternatives such as a home equity loan or line of credit.
What do I need to know about my credit report and score?
Your credit score is a number that represents your creditworthiness based on five factors: payment history, amounts owed, length of credit history, new credit and types of credit used.
Your credit score is the first thing most lenders will look at. Especially since you’re applying for a large personal loan, it’s important to have good to excellent credit to increase your chances of approval.
Different lenders, credit bureaus and other institutions have various credit rating systems, but a good credit score is typically in the high 600s.
Your credit report is different from your credit score. Your report is a detailed record of your credit history, including open accounts, credit inquiries and how often you make on-time payments.
You’re entitled to a free credit report from each of the three credit bureaus every year: Experian, Equifax and TransUnion. Lenders may look at the activity on these reports to see if there are any red flags that might not be apparent from your credit score.
Large personal loans typically require good to excellent credit. Your chances of qualifying for a $100,000 without a strong credit history and high credit score are fairly low. But if you think your score should be higher than it currently is, you can check the account listings and payment history in your credit report. There may be errors on your credit report that are hurting your score. Contact the credit bureau who issues the report to have any errors fixed. If all the information in your report is accurate, you could take steps to improve your credit score.
Can I get a $100,000 loan with bad credit?
Large personal loans typically require good to excellent credit. Your chances of qualifying for a $100,000 without a strong credit history and high credit score are fairly low.
But if you think your score should be higher than it currently is, you can check the account listings and payment history in your credit report. There may be errors on your credit report that are hurting your score. Contact the credit bureau who issues the report to have any errors fixed. If all the information in your report is accurate, you could take steps to improve your credit score.
For large personal loans, comparing your options is key to getting the lowest rate and best terms you’re eligible for. Even a slight increase in the APR you’re offered could mean a significant jump in the overall cost.
When you’re ready to consolidate all your debt, renovate your home or fund some other large expense, you’ll want to be fully prepared. That includes budgeting for the monthly loan repayments to avoid any penalty fees or undue costs.
Remember that you’re in control of the loan process. Up until you’ve signed the loan documents, you’re under no obligation to accept an offer. If you’re unsure about the terms and conditions, you can ask questions and even consider consulting with a professional or even a trusted friend.