How Much Personal Loan Can I Get On My Salary?

1. How do personal loans work?

Personal loans are a type of installment loan. That means you borrow a fixed amount of money and pay it back with interest in monthly payments over the life of the loan — which typically ranges from 12 to 84 months. Once you’ve paid your loan in full, your account is closed. If you need more money, you have to apply for a new loan.

Loan amounts vary from lender to lender, but typically range from $1,500 to as much as $100,000. The amount you qualify for is based on your credit health (i.e. how confident creditors are that you’ll pay them back if they lend you money).

It’s important to think about why you need the money and then choose the type of loan that’s most appropriate based on your current financial situation.

3. How long will I have to pay it back?

You'll have to begin paying the loan company back in monthly installments within 30 days. Most lenders provide repayment terms between six months and seven years. Both your interest rate and monthly payment will be impacted by the length of the loan you choose.

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Close the Loan

Approval and funding times vary by lender, but you can expect something close to the following.

Loan Approval Times

Once you are approved—ideally, for more than one loan—pick the one you like best, sign the papers, obtain funding. Then, of course, get ready for the next part: paying back the loan.

6. Does the personal loan have fees?

Personal loan lenders may charge a sign-up, or origination, fee, but most don't charge any fees other than interest.

An origination fee is a one-time upfront charge that your lender subtracts from your loan to pay for administration and processing costs. It's usually between 1% and 5%, but sometimes it's charged as a flat-rate fee. For example, if you took out a loan for $10,000 and there was a 5% origination fee, you would only receive $9,500 and $500 would go back to your lender. It's best to avoid origination fees if possible.

See our top picks for personal loans:

Select's list of the best 5 personal loans

Where Can You Find a Personal Loan?

You can find a personal loan in the following places:

  • Your bank or credit union
  • A peer to peer lending site
  • An online loan provider
  • A referral from a friend or family member
  • A private loan from an investor 

5. Impact on your credit scores

When you apply for a loan, the lender will pull your credit as part of the application process. This is known as a hard inquiry and will usually lower your credit scores by a few points.

Generally speaking, hard inquiries stay on your credit reports for about two years.

When you’re shopping around for the best rates, some lenders that you already have an account with will review your credit. This is known as a soft inquiry and doesn’t affect your credit scores.

Consider checking your rates with lenders that will do soft pulls, which won’t impact your scores.

Consider the Monthly Payment You Can Afford

Just because a lender determines that you can afford a certain loan amount based on your credit profile, income and debt, it doesn’t mean you should take the maximum offered.

Use a personal loan calculator to help you calculate a loan’s payment based on the amount, interest rate and repayment term, as well as how much you’ll pay over the life of the loan including interest charges.

Then check your budget to decide whether you can afford the expense. Making loan payments can limit your ability to achieve other financial goals, so make sure you’re prioritizing how you use and spend your money.

Questions to Ask Yourself Before Getting a Larger Loan 

While you’re researching the question “How much of a personal loan can I get?” you also might want to ask yourself, “How much should I be borrowing?”Just because a lender says you qualify to borrow $50,000 or more doesn’t mean you have to or should take the full amount. Before you agree to the lender’s offer, you may want to consider these questions: 

How Large of a Monthly Payment Can You Afford? 

If you follow a monthly budget, you already may know just how much you can add to your debt burden — or if you can drop or reduce another expense in exchange for the new loan payment. But you also could use an online personal loan calculator to determine how much you can afford using different loan amounts, interest rates, and loan lengths.  

What Is the Purpose of Your Loan? 

It’s possible the lender you choose won’t ask you your reasons to consider a personal loan — but you might want to ask yourself.If it’s something you’re doing to improve your finances, it may be a sensible move. Paying off high-interest credit cards with a lower interest personal loan, for example, could help you save money over the long run. Or if you have a pricey bill to pay — an expensive medical procedure, for instance — a personal loan might be your best option.But if you’re thinking about using a large personal loan to pay for an expensive vacation or some trips to the mall for new clothes, you may want to consider how it might affect your other financial goals, now and in the future. 

What Are the Monthly Payments on a $100,000 Loan?

The monthly payments on a $100,000 loan will vary based on your interest rate and loan term. However, you can easily determine the monthly payments on a loan by using the Forbes Advisor personal loan calculator.

Consider, for example, a borrower who takes out a $100,000 loan with an interest rate of 10% and a five-year (60-month) loan term. In this case, the borrower would have a monthly payment of $2,124.70. Alternatively, if the loan has a much shorter term—say three years—the monthly payment would be $3,226.72.

Personal documents you need to take out a loan

Lenders will typically require that you submit documentation to verify your information when going through the personal loan process. Here are a few documents you can expect to provide:

  • A loan application: The first step in getting a personal loan is to submit an application to a lender. This form should include your personal information, but also the reason for your loan, your credit score and income. After you turn in your application, your potential lender may contact you to verify the information you have provided.
  • Personal identification: You’ll typically need to prove to lenders that you are who you say you are. You may need to provide government-issued IDs, such as your driver’s license, birth certificate or passport, as well as your social security number.
  • Proof of address: Lenders may want to know where you live so they can send you bills and contact you. You may have to provide documents such as a copy of your lease agreement or utility bill to prove that you live at the address you stated.
  • Proof of income: Lenders want to know that, if they lend you money, they’ll be repaid. Your income can give lenders insight into whether you are able to repay the loan. To verify this, you may have to give documents such as W-2s, pay stubs or tax returns.

Low rates

With Personal Loan rates as low as 5.74% APR, now may be a great time to take care of your finances. Get started by checking your rates. Apply when you’re ready.

4 factors that affect your loan amount

With a personal loan, you may be able to borrow $5,000 to $50,000, depending on your needs and circumstances — but each lender has their own eligibility requirements.

However, all lenders will typically look at the following criteria to decide how much to lend to you and what interest rate you’ll have. 

1. Salary

Lenders want to make sure you have a source of income so you can keep up with your loan payments. Many lenders will require you to provide them with your annual salary, and they will have a minimum you have to meet in order to qualify for a loan.

For example, the minimum income required for a personal loan is $24,000 at Citizens Bank

2. Credit score

Your credit score is a number between 300 and 850 that lenders review when evaluating your loan application. The higher the number, the better. A good to excellent credit score, meaning a score between 670 and 850, indicates that you’re a low-risk borrower, so lenders are more likely to offer you a loan with favorable terms.

If your credit is less-than-stellar, you may still be able to qualify for a loan. However, you’ll likely pay higher interest rates, or you may need a cosigner in order to get approved. 

3. Debt-to-income ratio

Besides your income and credit score, lenders will look at your debt-to-income (DTI) ratio to decide how large of a loan you can handle. Your DTI ratio is the amount of monthly debt payments you have relative to your monthly income.

For example, if you earn $6,000 a month but have a $1,500 mortgage and a $200 student loan payment, your DTI ratio is 28.3%. That’s the sum of your debt ($1,500 + $200), divided by your income ($6,000).

You want to have the lowest DTI possible; that shows lenders that you can comfortably afford the payments on the loan you’re applying for. If your ratio is too high, you’re likely stretched too thin, and won’t qualify for a loan. Or, you’ll have to settle for a much smaller amount than you’d really like to borrow. 

4. Cosigner

If you have less-than-stellar credit or don’t make enough money, don’t despair; you may still be able to qualify for a loan as large as $50,000 if you have a cosigner. A cosigner is someone with good credit and a stable income who applies for the loan with you. If you fall behind on the payments, they’re responsible for making them instead. 

Having a cosigner reduces your lender’s risk, so they’re more willing to work with you and lend you the full amount you requested. Using a cosigner can also be a great way to score a lower interest rate. 

What are current personal loan interest rates?

Personal loan interest rates currently range from about 3 percent to 36 percent, depending on your credit score. As of January 31, 2022, the average personal loan interest rate is 10.28 percent. The better your credit score, the more likely you are to qualify for a personal loan with the lowest interest rate available. Compare personal loan offers to see what you are eligible for before applying for a personal loan.

Average personal loan interest rates by credit rating

Average personal loan interest rates range from 10.3 percent to 12.5 percent for “excellent” credit scores of 720 to 850, 13.5 percent to 15.5 percent for “good” credit scores of 690 to 719, 17.8 percent to 19.9 percent for “average” credit scores of 630 to 689 and 28.5 percent to 32.0 percent for “poor” credit scores of 300 to 629.

Other Ways to Get $100,000 In Financing

If a personal loan isn’t an option, there are other ways to get $100,000 in financing. There are options for people with equity in their home or other real estate, including:

  • Home equity loan. A home equity loan is a lump-sum loan that is secured by the borrower’s equity in their home. This involves taking out a second mortgage by borrowing against that equity. Because the loan is collateralized, the lender faces less risk than with unsecured loans. Consider a home equity loan if you need a lump sum of cash and have substantial equity in your home.
  • Home equity line of credit (HELOC). Like a home equity loan, a HELOC lets borrowers use their home equity to access a line of credit, which they can use on an as-needed basis and only pay interest on the funds they borrow. If you have a lot of equity in your home and need funds over an extended period of time—rather than all at once—a HELOC may be a good option.
  • Cash-out refinancing. In contrast to home equity loans and HELOCs, cash-out refinancing does not involve a second mortgage. Instead, the borrower refinances her mortgage for more than the outstanding balance of the original mortgage and gets the difference as a lump sum payment. This may be a good option if you have a high credit score and substantial equity in your home.

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