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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. You can use a $20,000 personal loan to cover almost any large expense, such as a , a wedding or a medical bill. But before you borrow such a significant amount of money, you should spend some time figuring out whether it’s the right move for you. Before you take out a $20,000 personal loan, be aware of common eligibility requirements, where to find one and how to estimate your total borrowing costs. How to determine if you need a $20 000 loan
Taking out such a large loan is a huge financial decision. If you take on more debt than you can afford to repay, there could be serious financial consequences, such as: Stretching yourself too thin financially: Before you take out a loan, review your finances to see whether you can afford to repay the loan. If you take on too much debt, you may find it difficult to contribute to essential financial goals, like retirement. Damaging your credit: If you fail to repay your loan, it could cause major damage to your credit score. As a result, it’ll be harder for you to qualify for future loans, like a mortgage or auto loan. That said, here are some scenarios where taking out a $20,000 personal loan could improve your financial situation: Consolidating high-interest debt: Do you have $20,000 worth of high-interest debt? Taking out a $20,000 loan to consolidate your debt could make sense if you can secure a lower rate. Funding home improvements: Depending on the type of you make, taking out a personal loan to cover the costs could help you increase the value of your home. Requirements to receive a personal loan
Eligibility requirements vary, but lenders typically consider these factors when you apply for a personal loan: Credit score: You’ll likely need to have a good to excellent credit score to qualify for such a large loan, without a cosigner. In general, the higher your credit score, the better your chances of qualifying and securing a lender’s best rates. However, it’s important to note that some lenders specialize in offering personal loans to borrowers who have bad credit. Debt-to-income (DTI) ratio: Your compares your monthly debt with your monthly income. Lenders review your DTI to assess whether you can afford to take on new debt. You can lower your DTI by paying down any outstanding debts. Income: To qualify, you’ll need to show a lender that you have enough steady income to make your future monthly loan payments. You typically do this by attaching financial documents to your loan application, such as W-2s and bank statements. Collateral: Most personal loans are unsecured, meaning they don’t require any collateral — something of value, like a car title or bank account — a lender can take if you default on your loan. Some lenders offer that require you to pledge collateral to qualify. Personal loan lenders that offer $20 000 loans
You can get a loan for this amount at several financial institutions, such as banks, credit unions or online lenders. Here’s a list of lenders that offer $20,000 loans to help jumpstart your search: APR range Loan amount range Minimum credit score requirement Avant 9.95% to 35.95% $2,000 to $35,000 580 SoFi 7.99% to 23.43% (with autopay) $5,000 to $100,000 680 LightStream 3.99% to 19.99% (with autopay) $5,000 to $100,000 Not disclosed TD Bank 6.99% to 21.99% $2,000 to $50,000 700 Avant
Avant specializes in offering unsecured personal loans to borrowers who have fair and less-than-stellar credit scores. If you qualify, your funds can be deposited into your bank account as soon as the next business day. The downside, however, is that Avant’s advertised rates are on the high side— they range from 9.95% to 35.95%. SoFi
SoFi offers a wide range of loan amounts, has competitive interest rates and doesn’t charge any fees. Its loan amounts range from $5,000 to $100,000; interest rates range from 7.99% to 23.43% (with autopay). To qualify, you’ll need good credit and a decent income. The minimum credit score requirement is 680; the minimum income requirement is $45,000 per year. LightStream
LightStream offers a wide range of repayment terms and loan amounts from $5,000 to $100,000 and offers a low minimum interest rate of 3.99% (with autopay) to well-qualified applicants. Repayments terms range from two to 7 years for most loans; and two to 20 months home improvement loans, swimming pool loans and solar loans. If you need a large loan for those purposes, you can enjoy lower monthly payments. TD Bank
TD bank offers personal loan amounts ranging from $2,000 to $25,000 without origination fees, prepayment penalties or application fees. It offers competitive interest rates that range from 6.99% to 19.99%. If you qualify, you can get loan funds deposited into your account as quick as one business day. However, a major drawback is that loans are only available in 15 states. Long-term costs of a $20 000 personal loan
Your overall borrowing costs depend on several factors, such as your interest rate, repayment term and any fees the lender charges. Common personal loan fees include , prepayment penalties and late payment fees. Choosing a lender that has minimal or no fees can lower your costs. You can also reduce your borrowing costs by choosing the shortest term available. The tradeoff is that your monthly payments will be higher. For example, say you take out a $20,000 personal loan at 8% and a three-year loan term. In that case, your monthly payment would be $627, and your total borrowing cost would be $22,562.18. By contrast, your total costs would be more for a $20,000 personal loan with the same interest rate but a five-year loan term. Although your monthly payments would be lower — $406, your total borrowing costs would be higher — $24,331.67. To estimate your total borrowing costs, use Bankrate’s . Bottom line
Taking out a $20,000 personal loan is a major financial decision. Before you move forward, first figure out if you actually need to take out such a large loan. Then estimate your borrowing costs to see how much you’ll spend over the life of the loan. If you determine that it’s the right move, be sure to compare and terms from multiple lenders to get the best deal. SHARE: Jerry Brown is a contributing writer for Bankrate. Jerry writes about home equity, personal loans, auto loans and debt management. Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information. Related Articles