How Much Can You Borrow With a Personal Loan?

Name: Maximum Limit for Personal Loan Amounts
Item: Maximum Limit for Personal Loan Amounts
Author: Zachary Romeo, CBCA

Personal loans typically range from $1,000 to $50,000, but some lenders may offer up to $100,000. According to TransUnion, the average personal loan balance for new accounts was $7,229 in the first quarter of 2024.

You can borrow personal loan funds for various uses like debt consolidation, home improvements, medical expenses or major purchases. How much you can borrow depends on several factors, including your credit score, income and current debts. Understanding your financial situation can help you determine your borrowing capacity and choose the right loan amount for your needs.

Personal Loan Amount Limits

Personal loan lenders vary in their approach to setting minimum and maximum loan amounts, tailoring these limits to align with their risk management policies and the financial needs of their customers. The minimum amount for a personal loan typically starts at around $1,000. Some lenders may offer amounts as low as $500, ideal for minor expenses or emergencies.

Most lenders offer maximum loan amounts of up to $50,000. Some lenders may extend even larger loans to very qualified borrowers. For example, Alliant Credit Union and SoFi are known to offer personal loans up to $100,000. These larger loans are usually available to those with excellent credit histories and strong financial standing.

A higher loan limit indicates a lender's trust in a borrower's financial stability and creditworthiness. The specific amount you can qualify for depends on factors like your income and credit score.

Factors Affecting How Much You Can Borrow With a Personal Loan

The maximum amount you can borrow with a personal loan is impacted by several factors, including:

Credit score

Lenders use your credit score to assess your creditworthiness, which helps them determine how likely you are to manage debt. A higher credit score indicates a lower risk for the lender, allowing you to borrow larger amounts. Conversely, a lower credit score suggests a higher risk of default, leading lenders to limit the loan amount you can access to mitigate their risk.

Income

Lenders look at your income to assess your ability to repay the loan. Higher income levels generally indicate that you have a greater capacity to manage monthly loan payments, which can lead to higher borrowing limits. When applying for a personal loan, you typically need to submit proof of income such as pay stubs, tax returns or bank statements to verify your earnings.

Current debt

Lenders examine your existing debts to understand your overall financial obligations. They use a measure called the debt-to-income ratio (DTI), which compares your monthly debt payments to your monthly gross income. A high DTI ratio indicates that a large portion of your income is already committed to debt repayment, which can reduce your borrowing capacity for a new loan.

Employment history

Lenders typically prefer borrowers who have been employed in the same job or industry for a considerable period. This consistency indicates that you are less likely to experience sudden income loss, which reassures lenders of your repayment capacity.

Loan type

Personal loans can be either secured or unsecured. Secured loans require collateral, allowing you to borrow larger amounts because the lender’s risk is reduced. Unsecured loans, which rely solely on your creditworthiness and financial situation, often come with lower borrowing limits to mitigate the lender's risk.

Loan purpose

The reason for your loan can influence how much you can borrow. For example, loans for debt consolidation might have higher borrowing limits because they aim to simplify and manage existing debts. Conversely, loans for more discretionary purposes, such as vacations or luxury purchases, might come with lower limits due to the higher perceived risk of non-essential spending.

Loan term

Longer loan terms generally allow for higher loan amounts because the payments are spread out over a longer period. This can make larger loans more manageable, but it also means higher overall interest costs due to the extended period of the loan.

Bank relationship

Having a long relationship with a bank or credit union can sometimes lead to more favorable loan terms because they may have a better understanding of the borrower’s financial history and risk profile.

Best Lender for $50,000 Personal Loans

First Tech

97MG Score
8.94% to 18.00%APR Range
UndisclosedMinimum Credit Score
$500 to $50,000Loan Amount Range
6 to 84 monthsRepayment Terms

First Tech Federal Credit Union is the best personal loan lender for individuals looking to borrow $50,000, earning a MoneyGeek score of 97 out of 100. This credit union is federally insured by the NCUA, allowing you to borrow as little as $500 or as much as $50,000. It offers interest rates from 8.94% to 18.00% APR and repayment terms between 6 and 84 months. There are no origination fees or prepayment penalties. However, you need to become a member to apply for a personal loan.

Pros

No origination or prepayment fees
Option to defer first payment up to 45 days
Insured by the National Credit Union Administration (NCUA)

Cons

No rate discounts
Requires membership to apply
Limited details on qualification requirements

Best Lender for $100,000 Personal Loans

Alliant Credit Union

94MG Score
10.99% to 13.99%APR Range
UndisclosedMinimum Credit Score
$1,000 to $100,000Loan Amount Range
12 to 60 monthsRepayment Terms

With a MoneyGeek score of 94 out of 100, Alliant Credit Union is our pick for the best lender for $100,000 personal loans. This federally insured credit union provides personal loans from $1,000 to $100,000, with interest rates from 10.99% and repayment terms between 12 and 60 months. It doesn’t charge origination fees and prepayment penalties. Plus, it offers a rate discount of 0.4% for automatic payments. That said, you need to be a member for at least 90 days to be eligible for a personal loan.

Pros

Doesn’t charge origination or prepayment fees
Has autopay discount
Offers a debt protection benefit plan

Cons

No soft credit inquiries
Need to be a member for at least 90 days to apply
Doesn't disclose qualification requirements

Calculate Your Monthly Personal Loan Payment

Use MoneyGeek’s personal loan calculator to estimate your monthly payments and total loan costs based on different loan amounts, interest rates and repayment periods.

Personal Loan Calculator

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Updated: Nov 21, 2024

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Deciding how much you should borrow with a personal loan largely depends on your intended use of the funds and your financial profile. To navigate this process, consider the following strategies:

Evaluate your financial needs: Start by pinpointing the exact reason for the loan — whether it's to cover an unexpected expense or a planned purchase. Determine your budget: Analyze your monthly budget to determine how much you can afford in loan repayments without financial strain.

Anticipate future financial situations: By anticipating any potential changes in your financial situation, such as a job change, you can opt for a loan amount that allows for these uncertainties and prevents financial stress in the future.
Check loan terms and interest rates: Understand how different loan amounts affect the terms and interest rates offered. Sometimes, borrowing slightly more can secure a better interest rate, but make sure to balance this with your ability to repay.

STATE SPECIFIC REGULATIONS ON PERSONAL LOANS

The maximum amount you can borrow and interest rate caps on a personal loan vary depending on where you live. Some states have regulations that limit these to protect consumers. For example:

California has a $300 limit for payday loans, which are short-term loans with high interest rates. Payday lenders in California can charge a maximum fee of $45 for these loans.
Florida allows consumer finance companies to make loans up to $25,000 at an interest rate higher than 18%. The maximum interest rates are tiered based on the loan amount.
In New York state, for personal loans of $25,000 or less, unlicensed payday lenders are not allowed to charge interest rates higher than 16%. Licensed payday lenders in the state are allowed to charge a maximum interest rate of 25%.

— Alvin Yam, CFP

Alternatives to Using Personal Loans

Personal loans offer flexibility and can be used for various purposes, but they are not the only solution. Depending on your credit score, financial goals and the amount you need to borrow, other financing options may provide more favorable terms or better align with your needs.

Credit cards

Credit cards offer a revolving line of credit with limits typically ranging from a few hundred to several thousand dollars based on your credit score and financial history. They are suitable for smaller, ongoing expenses rather than large one-time purchases.

Home equity loans

Home equity loans allow you to borrow against the equity in your home, often with limits up to 85% of your home's value. These loans are ideal for large expenses like home renovations or debt consolidation.

Personal line of credit

A personal line of credit provides flexible access to funds up to a predetermined limit, often ranging from $1,000 to $100,000. You can borrow as much as you need within this limit and only pay interest on the amount you use. However, qualifying for a personal line of credit often requires a strong credit history and higher income.

Peer-to-peer loans

Peer-to-peer (P2P) loans are funded by individual investors through online platforms, with borrowing limits typically between $1,000 and $50,000. These loans can be a good option if you have less-than-perfect credit and need a moderate loan amount.

FAQ: How Much You Can Borrow With Personal Loans

We answered some frequently asked questions about personal loans to help you decide if pursuing an application is a wise financial decision.

How much can I borrow with a personal loan?

The amount you can borrow with a personal loan typically ranges from $1,000 to $100,000, depending on the lender, your credit score, income and overall financial profile.

Can I get a personal loan if I have a low credit score?

Yes, you can get a personal loan with a low credit score, but the loan amount might be smaller and the interest rates higher. Some lenders specialize in loans for individuals with lower credit scores, but they often impose stricter terms and higher fees.

Can first-time borrowers get high loan amounts?

First-time borrowers may face lower loan limits due to a lack of borrowing history. Over time, as you build credit, you can qualify for larger amounts.

Are there fees that affect the amount I receive?

Yes, some lenders charge origination fees, which are deducted from the loan amount before you receive it. Make sure to account for these fees when determining how much you need to borrow.

How quickly can I receive the loan amount once approved?

The time it takes to receive the loan amount can vary by lender. Some lenders can disburse funds within a day, while others may take a few days to a week. The speed depends on the lender’s processes and your bank’s policies.

Can I increase my borrowing limit over time?

Yes, you can potentially increase your borrowing limit over time by improving your credit score, increasing your income and reducing your existing debts. Demonstrating a strong repayment history with current loans can also make lenders more willing to offer higher loan amounts in the future.

About Zachary Romeo, CBCA

Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.

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sources

TransUnion. "Credit Industry Snapshot." Accessed October 10, 2024.

The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.

Maximum Limit for Personal Loan Amounts