Get a $20,000 personal loan

Eligibility requirements for a $20,000 loan

Each lender has its own special sauce when it comes to evaluating applications. But most consider the following information when deciding what rate, term and loan amount you’re eligible for:

• Reason for borrowing. What you plan to use the loan for is a good indicator for the lender of how reliable you are. If you plan on consolidating your debt, for example, lenders might view that as responsible borrowing and see you as a stronger applicant.
• Credit score. Your credit score is often one of the most important factors in qualifying for a large loan with a competitive rate. You generally have more options if you have good to excellent credit: 670 and up.
• Income and debts. Lenders tend to look at how much you can afford to pay month to month by looking at your debt-to-income (DTI) ratio.
• Employment status. Many lenders require you to be employed full time and some won’t work with self-employed applicants. There are still options if you’re unemployed, but they’re limited.

Can I get a loan for $20,000 with bad credit?

You may not be able to qualify for a $20,000 loan if your credit isn’t the best, with most traditional lenders anyway. There are lenders that specialize in bad credit personal loans, with amounts typically ranging from a couple hundred dollars to $10,000.

Loans of $20,000 or more aren’t typically offered with no credit check — it’s risky to lend a large amount without any collateral or credit check.

If you don’t need $20,000 right now and your credit is poor, consider taking steps to repair your credit first. It’s a process that doesn’t happen overnight, but it can greatly improve your chances of qualifying and getting a fair rate.

There are alternative forms of lending as well, such as title loans, which may be easier to qualify for with poor credit since the vehicle is put up for collateral.

How to increase your chances of approval and get lower rates

Personal loans around $20,000 are bound to have some requirements, and there are a few ways to increase your approval odds and tactics to get lower rates.

1. Boost your credit score. This is sometimes easier said than done, but there are many ways to go about improving your credit score. Review your credit reports, check for errors, pay down your credit cards, resolve any issues with existing creditors — there are many ways to work on your credit.
2. Calculate your monthly expenses. Depending on your term and loan amount, you’ll likely need to have around $1,500 to $4,000 available per month after you pay your bills to qualify for a $20,000 loan. Knowing your budget can help you determine how much you need to borrow, and how short of a loan you can realistically get.
3. Consider a secured loan. Secured loans for things like the purchase of a car typically come with lower interest rates than unsecured loans because the lender is taking on less risk by requiring collateral. Securing the loan with an asset like a vehicle may increase your chances of approval.
4. Bring on a cosigner. If you know someone with a better credit score that’d be willing to cosign, consider asking them to help out. Cosigners decrease risk since there would be two people backing the loan, and you may qualify for a lower rate than if you were to apply alone.
5. Copplicant for more income. Income not up to par? A coappliant, or co-borrower, is someone who shares equal responsibility for the loan with you. Both borrower’s incomes are pooled together to see if you meet income requirements. This can help with a high DTI ratio and increase approval chances, since there are two borrowers with income responsible for the payments.

How much will it cost?

The cost of a $20,000 loan depends on two factors: APR and loan term.

Your loan’s APR is an expression of how much you’ll pay in interest and fees over a year. At the time of writing, 10.7% is the average interest rate on a personal loan, according to Bankrate. Your loan term is how much time you have to repay your loan, in months or years.

Loans with a longer loan term tend to have lower monthly payments. But they allow more time for interest to add up, increasing how much your loan costs in the long run.

For example: A $20,000 loan term with a 10.7% interest rate over 24 months will likely run you around $2,304.97 in interest charges with a $929.37 monthly payment.

If you extend that loan out to 36 months, interest charges increase to $3,469.72 — that’s an extra $1,164.75 increase by extending the loan by just one year. However, the 36-month loan does have a smaller payment, sitting around $651.94.

Longer loan terms mean smaller monthly payments, but keep the overall cost in mind.

Calculate your loan repayments

Use our calculator to find out how much you might pay each month on a $20,000 loan at different rates and terms.

How to get a $20,000 loan

Applying for a personal loan is very similar to other loan types. Here are the general steps to expect:

1. Compare multiple lenders. There’s always the possibility of finding a provider close to home, so it may be worth checking with your local bank or credit union. But regardless if you have an established relationship with the lender, compare all of your options before signing the dotted line.
2. Keep your limits in mind. Take time to go over your income and expenses and find out just how much you can afford in repayments every month — and make sure you’re not overextending yourself.
3. Know your credit score. Your credit score significantly affects your interest rate for most personal loans. Knowing your score can help you formulate an idea of what will be available before you shop around.
4. Assemble your paperwork. Check what’s required by the lender beforehand, if possible. At a minimum, you’ll want to have copies of your financial records, bank statements and government-issued ID like your driver’s license or passport.
5. Apply for the loan. If you’ve found a lender on this page, click the green Go to site button to get started. Your full name and contact information, the amount you want and the purpose of the loan are usually required fields in the application. Some lenders offer preapproval, while others may take longer to offer the final approval decision.

How to pay off $20,000 in debt

For a $20,000 loan term, the repayment period could be anywhere from one to seven years. And $20,000 is a pretty large amount — it’s on par with a typical car loan.

If you’re itching to pay off your debts early or feeling overwhelmed, consider these methods:

• Debt consolidation. If all your other debts and the $20,000 are becoming too much to manage each month, then it may be time for debt consolidation. It is often done by applying for one large loan to pay off your original lenders, effectively reorganizing your debts into one manageable monthly payment.
• Refinancing. Refinancing is a very popular choice for borrowers that have improved their credit score since the start of a loan. If this is you, then you could try refinancing to try for a lower interest rate. This could not only save you money in interest charges, but also lower your monthly payment.
• Early payoff tactics. There are many ways to go about an early payoff, as long as you don’t have prepayment penalties. You could round up your monthly payment, do bi-weekly payments to save interest, or make extra payments when able.

What to watch out for

Think a $20,000 personal loan is right for you? Consider these factors before signing the dotted line:

• All that fine print. Carefully read the terms and conditions of your loan agreement before you sign off on a $20,000 loan. Look for information about prepayment options, penalties, privacy policies and your rights as a borrower.
• Extra costs. Consider any fees or charges beyond the interest rate. Outside of upfront fees, keep an eye out for early repayment fees or late payment penalties. It may also be possible to negotiate some of the upfront charges, like loan origination fees — which typically run between $200 and $1,000 on a $20,000 loan.

If a $20,000 personal loan doesn’t feel quite right, check out some personal loan alternatives.

Other loan amounts

• $10,000
• $15,000
• $35,000
• $50,000
• $75,000
• $100,000