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If your credit is not quite up to a lender’s preferred level to get favorable interest rates and terms on your own, you might consider a joint personal loan. With this type of loan, you would have a co-borrower, an additional borrower who is obligated to repay the debt alongside you, the primary borrower. A co-borrower who has solid credit, income, and other financial credentials can help you qualify for a personal loan.

Here are key things to know about using a co-borrower on a personal loan.

What Are Joint Personal Loans?

Joint personal loans are loans that take into account multiple borrowers’ creditworthiness in the approval process. There are typically two borrowers on this type of loan — a primary and a secondary borrower — to establish joint personal loan eligibility.

Being a co-borrower on a loan comes with different rights and responsibilities than being a cosigner on a loan.

•   Co-borrowers, along with the primary borrower, have equal ownership of loan funds or what is purchased with the loan funds and are equally responsible for repayment of the loan over the life of the loan.

•   Cosigners have no ownership of the loan funds or what they’re used to purchase, and they are responsible for repayment only if the primary borrower fails to make payments.

How to Use Joint Personal Loans

If you don’t feel confident about qualifying for a loan, or have concerns about a potentially higher interest rate due to your overall creditworthiness or other reasons, finding a reliable co-borrower might help improve your chances of approval, along with the interest rate and terms you’re offered.

Couples can use a joint personal loan for a wide variety of purposes, including consolidating high-interest debts, paying for a large expense or event (like a wedding), or funding a remodeling project.

Recommended: Using Collateral on a Personal Loan

Why Do People Use Joint Personal Loans?

One common reason why someone might consider a joint personal loan is that they cannot qualify for a loan on their own, or they would like to snag a lower interest rate or qualify for a larger loan amount than they could on their own.

Some reasons people may seek a co-borrower are:

•   They don’t have a long credit history.

•   They’ve just entered the workforce.

•   They’re in the process of rebuilding their credit.

•   They are seeking a larger loan than they could on their own.

How Much Can You Save With Joint Personal Loans?

Having two borrowers on one personal loan may help you to qualify for a more favorable interest rate than if just one person’s income and credit are considered. Different lenders will have different qualification requirements, though, so it’s a good idea to compare lenders.

Using a joint personal loan for debt consolidation can be one way to lower the amount of interest paid on outstanding debt. Again, how much savings is accomplished depends on multiple factors, such as the interest rate offered and how long it takes to pay down the debt.

Factors That Affect Joint Loan Approval

Here are some important points about applying for a loan with a co-borrower and understanding what impacts your odds for approval.

Combined Income and Debt Obligations

When your application for a joint personal loan is reviewed, the lender will look at your combined income and debt obligations. Perhaps the primary borrower has a relatively low income and high debt load. By adding a co-borrower who has a strong salary (say, a spouse’s salary in the six figures) and minimal debt, the odds for loan approval could be enhanced.

Say that the primary applicant has a debt-to-income ratio, or DTI, of 48%, which is above the 36% many lenders prefer. If a co-borrower has a DTI of 22%, the couple’s DTI as a whole is 35%, bringing it to a level that may gain approval.

Credit History of Both Applicants

Similarly, lenders will take into account both applicants’ creditworthiness. Perhaps the primary borrower has what’s known as a thin file, meaning they don’t have a very deep credit history, or has a fair credit score. If their co-borrower has a credit score in a higher range (very good or exceptional), that could convince a lender to approve the loan and potentially at a lower rate and with more favorable terms. The co-borrower could help assure the lender of the duo’s creditworthiness.

What Credit Score Is Required for a Joint Personal Loan?

There is no definite answer to this question, but, in general, applicants with higher credit scores qualify for loans with lower average personal loan interest rates. And, vice versa, applicants with lower credit scores generally qualify for loans with higher interest rates.

Lenders tend to be risk-averse and prefer to lend money to people who they believe will repay it in full and on time. An applicant’s credit report — a summary of how responsible they are with credit that has been extended to them in the past — and credit score are tools lenders use to assess risk.

Before applying for a joint personal loan, it’s a good idea to review your credit report. If there are errors or discrepancies, you can file a dispute with the credit reporting agency. If you have poor credit or a limited credit history, you might consider taking some time to improve your credit profile before applying for a loan. Lenders will look at both applicants’ credit reports during the joint personal loan approval process, so it’s worth it for your credit to be in good shape.

Recommended: What Credit Score Do You Need for a Personal Loan?

Individual vs Joint Loan Applications

The basic process of applying for a loan is the same, no matter the number of applicants. Lenders will typically request the same information on either an individual or a joint loan application: proof of identity and address and verification of employment and income, in addition to any lender-specific information. For an individual loan application, there is just one person’s information to verify. Joint loan applications require information for each applicant.

Cosigned Loan vs Joint Personal Loan: The Advantages

Arguably, the primary borrower on either a cosigned loan or a joint personal loan has a bigger advantage than the cosigner or co-borrower. Depending on one’s perspective, however, all parties involved can reap benefits from these partnerships.

The Advantages of Choosing a Cosigned Loan

The advantage lies almost exclusively with the primary borrower on a cosigned loan. If they default, the cosigner is responsible for repaying the loan, although the primary borrower’s credit will likely be negatively affected. Ownership of the loan funds or what they purchased with the money is solely the primary borrower’s.

A personal loan cosigner’s main advantage may be in the form of a benevolent feeling from helping a close friend or family member.

The Advantages of Choosing a Joint Personal Loan

The main advantages of a joint loan are two-fold. There is equal ownership of the loan funds or the property purchased with those funds. Choosing a joint loan also means you may be able to present a more positive financial profile when applying than you could alone, signaling to lenders that it’s more likely the monthly loan payments will be made. This could pay off with a lower interest rate and more favorable terms.

Because joint loans give both co-borrowers equal rights, they are well-suited for people who already have joint finances or own assets together.

Cosigned Loan vs Joint Personal Loan: The Disadvantages

Both cosigned and joint loans include an additional borrower. However, a co-borrower taking out a joint loan has different rights and responsibilities than a cosigner, which can be risky.

The Disadvantages of Choosing a Cosigned Loan

The disadvantages of a cosigned loan lie mostly with the cosigner, not the primary borrower. The cosigner does not have any ownership rights to the loan funds or anything purchased with the loan funds. They are, however, responsible for repayment of the loan if the primary borrower fails to make payments.

The cosigner’s credit can be negatively affected if the primary borrower defaults on the loan, and their future borrowing power could be affected if a lender decides extending more credit would be too risky.

The Disadvantages of Choosing a Joint Personal Loan

People who already share financial responsibilities — married couples or parents and children, for example — may be the ones who consider joint personal loans, so there is typically some familiarity present.

That trust matters because co-borrowers have equal ownership rights to the loan funds or what the loan funds purchased. And it’s also important to have confidence in a co-borrower’s ability to repay the loan because each borrower is equally responsible for repayment over the entire life of the loan.

What’s the Better Loan Option?

If you’re seeking a loan with a spouse or relative and one of you has the strong credit history needed to get a favorable interest rate and terms, then a joint loan as co-borrowers may be right for you.

However, if you’d rather have a loan in your name with a little added security, then having a cosigner may make more sense.

No matter which situation you find yourself in, it’s important to weigh all of the options and do the necessary research that will allow you to arrive at the best joint personal loan option for you. (You might also consider personal loan alternatives as part of your research.)

After all, taking out a loan and repaying it responsibly has the power to put someone on a path to a more secure financial future, but it can also come with risks for each party.

Recommended: Exploring the Pros & Cons of Personal Loans

Where Do You Find a Joint Personal Loan?

It’s not uncommon for lenders to offer joint personal loans, but some research is necessary to find the right lender for your unique financial situation.

Looking at lenders of joint personal loans online is a good first step. Prequalifying to check joint personal loan eligibility is a fairly quick and easy process.

If you’re already an established customer at a local bank or credit union, you may also want to look at loan options there.

Tips for Applying for a Joint Personal Loan

If you decide to pursue a joint personal loan, consider these points to make the process easier.

Communicate Financial Responsibilities Clearly

As you apply for a joint personal loan, it’s wise to make sure you both agree on the details, such as the loan amount, the monthly payment you can afford, and who will pay it (will you split it 50/50?), and when. Develop a contingency plan if you struggle to make a payment.

Compare Lenders and Loan Terms Together

It’s also important to make sure the two of you are aligned on reviewing and deciding upon your loan. It’s wise to consider at least a few loan offers to see what rates and terms are available. For instance, a shorter loan term can mean higher monthly payments but less interest paid over the life of the loan. That might be preferable, if you can afford it, versus a longer term with a lower monthly payment, because that winds up often costing more in total.

Also make sure you both understand the consequences of late or missed payments before embarking on the loan together.

The Takeaway

Co-borrowers may help a primary borrower secure a personal loan by presenting a more positive financial profile and securing more favorable rates. However, these joint loans also require a great deal of forethought since both borrowers have access to the funds and responsibility for repaying the debt.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Can you apply for joint personal loans?

As long as the lender allows co-borrowers, you can apply for a joint personal loan.

What is the maximum amount of people for a joint personal loan?

Typically, a joint personal loan has two co-borrowers, but the maximum number of co-borrowers is up to the individual lender. Some allow for more than two borrowers.

Do joint personal loans get approved faster?

It’s likely to take more time for a joint personal loan to be approved than an individual loan because the lender will check the credit of each applicant.

Does a joint loan affect both credit scores?

Yes, a joint loan affects both borrowers’ credit scores. If loan payments are made on time, the borrowers could see a positive impact on their credit. If, however, payments are late or missed entirely, that can negatively impact each of the borrowers’ credit.

Can one person be removed from a joint personal loan?

Removing one person from a joint personal loan is dependent on the lender’s specific guidelines. It can be a complicated process that may involve refinancing the loan into a new individual loan, provided the solo borrower qualifies.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q425-057

If your home isn’t connected to a local sewer system, a septic tank is a must. But setting up a new septic system or replacing an old one can be a pricey endeavor. A new system, as of 2025, can typically cost between $3,634 and $12,512, with an average of $8,035, according to the home improvement site Angi.

Fortunately, there are a few different payment options available to help homeowners cover the costs of installing this essential piece of equipment.

In this guide, you’ll learn the various sources you might choose to fund your septic system project, and some of the pros and cons of each.

Septic System Costs

Most homeowners in the U.S. pay from $3,634 to $12,512 for a septic system installation, according to the home improvement site Angi. The average cost comes out to about $8,035. But prices can vary significantly depending on the size and type of tank you choose, the materials used, labor, and other factors — and costs could go over $20,000.

If you’re a die-hard DIYer who’s considering tackling this project with the help of some YouTube videos, you may want to think again. This is a big and dirty job that’s probably best left to professionals with the experience and machinery to get it done right. Here, take a look at some ways you can pay for the work and stay clear of the mess and stress.

Recommended: Personal Loan Interest Rates

What Factors Influence Septic System Pricing?

How much a new septic system costs will depend on several factors. Among them are:

•   How large and complex the septic system is

•   The site conditions, which can include everything from whether it’s steeply sloping to what type of soil needs to be dug up

•   Local permit guidelines and other regulations

•   What type of materials and tank you opt for

•   The cost of labor which can vary considerably with the cost of living in your area

As with other home improvement projects, it’s wise to comparison-shop and get multiple bids before starting a septic system replacement project.

Personal Loans for Septic System Financing

If you need to finance your project in a hurry (and with a septic system repair, that’s often the case), you may want to consider a personal loan.

With personal loans, it’s possible you could receive your money on the same day you apply or within a few business days. You also may have some flexibility in when the funds arrive and how long you have to pay back the money.

Personal loan repayment terms typically range from two to seven years, but they vary by lender. The amount you can borrow and the interest rate you’ll pay with home improvement loans are generally based on a few different factors, including your credit score. Typically, the better your credit, the lower the interest rate.

Generally speaking, qualifying borrowers with a strong credit history and high income may be able to secure a loan of up to $100,000 without having to provide some type of collateral. This type of home improvement loan usually has a fixed interest rate, so you can know exactly what your monthly payments will be.

Home Equity Loans and HELOCs

Another potential way to finance a septic system project is to tap your home equity and apply for a home equity loan or home equity line of credit (HELOC).

If you qualify for a home equity loan for your septic system, you’ll receive a lump-sum amount that you’ll repay in equal monthly installments, much like a personal loan.

A home equity line of credit (HELOC), on the other hand, works more like a credit card. The interest rate usually isn’t fixed with a HELOC, and neither is the payment amount. As you repay the money you’ve borrowed, you can use it again — up to a predetermined limit.

Because both home equity loans and HELOCs are secured with your home as collateral (which means the lender can foreclose if you fail to make your payments), the interest rates are generally lower than with unsecured personal loans. But it’s worth noting that you typically have to have at least 15% to 20% equity in your home to qualify, it can take longer to get your money, and you can expect to pay closing costs with this type of financing.

Credit Score Considerations for Septic System Loans

If you’re planning on getting a loan to finance a new septic system, your credit score will likely come into play in a few important ways.

•   Your credit score and credit report will impact the kind of loan you qualify for. Those with higher scores and strong reports will usually be approved for lower interest rates and higher loan amounts, and the opposite is true as well.

•   More specifically, many lenders require a good to excellent credit score (say, 660 or higher) in order for an applicant to be approved for a loan at a favorable rate. Loans are often available to those with lower scores (even borrowers with bad credit), but they will probably involve higher interest rates.

•   When you apply for a loan to fund a new septic system, the lender will typically require a hard credit pull to gain insight into your creditworthiness. This usually lowers your credit score by several points for a short period of time.

•   Once you have a loan for your new septic system, on-time payments should positively impact your credit score. Late payment or missing payments entirely, however, can lower your score.

Government Programs and Grants

If you meet certain criteria, you may be able to get help with funding through federal or state assistance programs. Here are a few options you may want to research:

•   The Environmental Protection Agency (EPA) Clean Water State Revolving Fund provides grants to all 50 states and Puerto Rico so that qualifying residents can receive low-interest loans to install, upgrade, or maintain their septic systems.

•   The U.S. Department of Agriculture (USDA) offers both loans and grants that can benefit low-income homeowners who need help with their septic system costs.

•   An FHA 203(k) loan combines a mortgage and funding for repairs, which may include septic system replacement.

•   The Department of Housing and Urban Development (HUD) provides community block grants to help eligible homeowners repair, install, or improve their residential septic system.

•   Some states also offer tax credits or deductions to residents who repair or replace a septic system. (You may want to check with your state government or local tax professional first to see what’s available and if you qualify.)

Contractor Financing and Payment Plans

It’s possible the septic tank company you’re considering has teamed up with a lender in order to offer its own financing plan to potential customers.

The salesperson or contractor will likely take you through each step of how the company’s septic tank financing works and may even offer a financial incentive if you sign up. Just remember that a contractor isn’t obligated to find you the best payment solution when it comes to how to pay for septic repair. So it’s important to review and understand the terms of any offer you receive, and to compare the contractor’s offer with other options available.

Recommended: How Much Does a Home Inspection Cost?

Comparing Septic System Financing Options

Hopefully, you’ll have time to do some comparison shopping as you consider the various financing methods for your septic system project. Here are some things to keep in mind as you do your research:

•   What monthly payment works for your budget? A longer loan term generally means lower monthly payments. Keep your budget in mind as you choose how much time you’ll need to pay back your septic tank installation financing.

•   How’s your credit? Good credit can often get you a better interest rate and other loan terms. If you aren’t sure where your credit stands, you may want to check out your latest credit report and/or credit score and dispute any errors you see.

•   What’s in the contract? Understanding the terms you’re being offered for a septic tank loan can keep you from running into trouble down the road. For example, if a contractor or credit card company offers you a low introductory interest rate, it’s important to ensure you’ll have enough time to pay off your purchase before the interest rate goes up.

•   Are there fees? Remember, fees can add to the overall cost of your loan. Some lenders may charge origination, application, and other loan fees. And you can expect to pay for a home appraisal and other closing costs if you get a home equity loan or HELOC.

•   How fast can you get the money? If you don’t have enough cash stashed away for your project, applying for a personal loan may be the quickest way to finance the work. Some personal loan lenders can get you your money on the same day you’re approved. Contractor financing also may offer a convenient and fast approval process.

Tips for Choosing the Right Financing Option

Deciding on the right financing option for your septic system replacement or repair will depend upon your unique situation. A few points to consider:

•   If you are in a rush to get your system back up and running (which is often the case), a personal loan can be a good avenue to pursue. Some lenders even offer same-day financing options. Note that your credit score will come into play, with higher scores typically contributing to lower interest rates.

•   If you have built up home equity, you might investigate a home equity loan or line of credit. These can take longer to secure and they use your home as collateral (meaning you risk foreclosure if you default), but they can offer favorable interest rates.

•   If you qualify, you may be able to secure government-backed loans and grants to pay for your septic system work. Diving into the requirements and documentation needed is a key step here.

•   Contractor payment plans may work well for some homeowners; be sure to review the terms and conditions carefully and compare them to other options.

•   Another option is to use your emergency fund to take advantage of a no-interest way to finance the work needed.

Understanding Total Loan Cost

As you look into the options available for funding your septic system work, remember to consider the total cost of the loan. That includes:

•   The principal, or the amount you are borrowing

•   The interest charged over the life of the loan

•   The fees that are often assessed, such as origination fees, which can be 1% to 10% of the principal amount

Understanding these factors will help you determine the full cost of the loan over the term you select and how much money you may need upfront. Equipped with this intel, you can determine which loan option best suits your needs.

Evaluating Repayment Flexibility

Sometimes, as you repay a loan, life happens and finances get tight. In that case, you may need flexibility to repay your loan. You may want to check the fine print before signing up for a lona. Features that can help in challenging times include grace periods, which are a buffer between when the payment is due and late fees kick in. Also, a loan may offer deferment and forbearance options, allowing you to pause or reduce payments in times of financial need.

On the other hand, you may also want to look into whether a loan offer has prepayment penalties. These fees can be applied if you pay off a loan before the term expires. The reason: The lender is losing out on the interest payments they were expecting to collect over the life of the loan. Prepayment fees can help compensate them for that.

Lastly, keep in mind that other features impact your repayment. A longer term can lower monthly costs but increase the amount of interest you pay over the life of the loan. Also, whether you opt for a fixed or variable rate loan will influence your monthly payment amounts, meaning whether they are stable or vary with the market.

The Takeaway

Replacing your septic system can be expensive, currently averaging more than $8,000. To fund this project, you might look into tapping your home equity via a home equity loan or line of credit, wherein you use your home as collateral. Or perhaps there’s a contractor financing plan that suits your needs. A personal loan, sometimes called a home improvement loan, can be a good option for many people, especially when funding is needed quickly; no collateral is typically needed. You may also be able to cut some of your costs if you can qualify for a government-funded grant or low-interest loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Are there tax deductions for septic system installation or repair?

A new septic system doesn’t qualify for any of the tax credits the Internal Revenue Service, or IRS, currently allows for home improvements. But some states offer tax credits or deductions to homeowners who replace or repair a septic system. A tax professional in your area can help you check for potential tax savings.

Can I finance both installation and ongoing maintenance of my septic system?

It’s a good idea to make septic tank maintenance costs a part of your household budget, but those expenses likely won’t be included in the amount you borrow to pay for a new system.

Are there special financing options for rural homeowners?

Yes. USDA loan programs can benefit rural homeowners who need to repair or replace a septic system.

What credit score do I need to qualify for septic system financing?

There is no one single credit score needed to qualify for septic system financing. However, it’s important to know that higher credit scores typically lead to approval for more favorable loan interest rates and terms, while people with bad credit are usually assessed higher rates and, say, qualified for lower loan amounts.

How long does it take to get approved for a septic loan?

How long it takes to get approved for a septic system loan will depend on the kind of financing you seek. If you are applying for a home equity loan or line of credit, that can take up to 6 weeks, depending on the lender and your specific circumstances. A personal loan can be significantly faster, with some lenders offering same-day funding or disbursement in just a few days.

Photo credit: iStock/Kwangmoozaa

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q425-054

A personal loan can be a relatively low-interest way to access a lump sum of cash, which is usually paid back in monthly payments. This kind of unsecured installment loan (meaning you don’t need to put up collateral) can be used for a variety of purposes. For example, you might pay off high-interest credit card debt, fund a home renovation, or finance a family reunion trip to the beach next summer.

Here, you’ll learn the full story on one popular option, a $10,000 personal loan.

Reasons to Get a $10,000 Personal Loan

Many prospective borrowers are attracted to personal loans because of the freedom and flexibility that they offer compared to some alternatives. Reasons to get a $10,000 loan might include the following:

•   To pay off an unforeseen expense, such as costly car repairs or a major medical bill. (A borrower might use a lesser sum, like a $5,000 personal loan, in some situations.)

•   To consolidate other debts. For example, assume you have a $10,000 balance between two credit cards, each having an interest rate of over 20%. You might be able to secure a $10,000 personal loan with a significantly lower interest rate to pay off that debt.

•   To pay for a home renovation.

•   To start a side hustle.

•   To cover wedding expenses, such as venue costs, catering, or attire, through a wedding loan.

•   Any other legal need for a cash infusion.

Pros and Cons of Taking Out a $10,000 Personal Loan

Consider the pros and cons of taking out a $10,000 personal loan as you explore this option.

$10,000 Personal Loan Terms

Depending on the lender, the repayment periods typically range from 12 months to 84 months.

You can shop around for a personal loan with terms that allow for affordable monthly payments. Keep in mind that a longer term likely means you will pay more interest over the life of the loan.

When calculating the overall costs of a personal loan, consider such factors as the principal amount borrowed, interest rate, fees, and the loan term. You might use an online personal loan calculator to help you tally up costs.

Note: Also keep in mind that some personal loans are secured loans, meaning that you put up collateral which the lender can take ownership of if you default on the loan. Be clear on whether the loan you seek is secured or unsecured.

$10,000 Personal Loan Monthly Payments

Personal loans are typically repaid over a multi-year term through monthly payments. The cost of the monthly payments is influenced by the interest rate that applies to the specific loan. Interest rates are essentially the fees charged by the lender for providing the loan.

The lowest interest rates are typically offered to consumers with a good to excellent credit history and may also be influenced based on other factors including their current income. Generally speaking, lenders charge lower interest rates if they think an applicant is likely to repay their loan in a timely way.

The following chart shows the impact that interest rates have on the monthly payment and also how choosing a longer-term loan can increase the overall cost of the loan.

Personal loan interest rates are generally fixed, which means the monthly payment will remain the same. Variable-rate personal loans are offered by some lenders, and payments will be influenced by market conditions.

Recommended: $20,000 Personal Loan Rates and Requirements

$10,000 Personal Loan Fees

In addition to interest, some lenders charge origination fees that will also increase the overall cost of the loan.

The combination of the interest rate and any applicable fees is the annual percentage rate (APR) of the loan. Calculating the APR is necessary for determining the true cost of the loan. Recent Federal Reserve data shows the average APR of a 24-month personal loan to be 11.14%.

It’s important for applicants to closely review the terms of any potential loan agreement. For example, a lender may charge a late fee when payments are not received on time, and some may have prepayment penalties that apply if a borrower pays off the loan ahead of schedule.

Recommended: 39 Passive Income Ideas to Help You Make Money

What Credit Score Do You Need To Get a $10,000 Personal Loan?

Your credit score is a three-digit number that a lender checks to assess your creditworthiness. The most popular credit scoring systems (like FICO® Score) usually range from 300 to 850. Your credit score is calculated largely based on your credit history because past consumer behavior tends to predict the future.

Here are the usual credit score ranges according to FICO:

•   300 to 579: Poor

•   580 to 669: Fair

•   670 to 739: Good

•   740 to 799: Very good

•   800 to 850: Excellent or exceptional

There’s no single credit score needed for getting a personal loan. Keep in mind that a $10k loan is close to the average personal loan amount (the current average is $11,724). Rates may vary depending on the size of your loan.

Can You Get a $10,000 Personal Loan With Bad Credit?

In general, you need a good credit score to qualify for a personal loan. If you have bad credit (say, in the poor or fair range), you might still be able to secure a loan, but potentially at a higher interest rate. If your credit score is in the very good or exceptional range, you may qualify for even more favorable interest rates and terms.

If a personal loan with bad credit is more expensive than you like, you might look into personal loan alternatives, such as a salary advance or using credit cards.

How Long Does It Take to Get a $10,000 Personal Loan?

Personal loans are known for offering fast processing — or funding — times, particularly among online lenders. Many lenders today offer same-day or next-day funding of personal loans after approval. Applicants should be properly prepared with the documentation necessary to confirm their identity, address, and income, as well as current bank statements.

Requirements for a $10,000 Personal Loan

Requirements will vary across lenders. However, qualifying for a $10,000 personal loan typically requires a credit score in the good range, an active checking account, and a steady, verifiable income, among other factors.

Top $10,000 Personal Loan Lenders

Here’s a look at some of the current leading personal loan lenders, along with interest rate ranges.

How to Compare $10,000 Loan Offers

When comparing offers for a $10,000 personal loan, keep these tips in mind:

•  Focus on the APR vs. simply the interest rate to get a better idea of the actual costs of borrowing, with fees included.

•  Look at the total cost of the loan over its term. You’ll see that a longer term typically reduces your monthly payment but means you pay more interest over the life of the loan.

•  Do look into the fees involved, such as origination and late fees, as well as prepayment penalties. These can make a significant difference in some situations, so you want to take out a loan with a “no surprises” understanding.

Tips for Getting Approved for a $10,000 Loan

If you’re thinking about applying for a $10K personal loan, here are some ways to help improve your odds of success. You’ll see that understanding and optimizing your creditworthiness can be an important step.

•  Work on maintaining or building a credit score that’s at least in the good range, if not very good or exceptional for the most favorable terms.

•  Check your credit report for any errors and work to correct any that you find.

•  Calculate your debt-to-income ratio, or DTI, and focus on keeping it below 36% for the best odds of approval.

•  Only borrow how much you actually need, since applications for higher sums can face a more stringent approval process.

•  Gather all of your documentation (such as pay stubs, tax returns, and bank statements) needed for personal loan approval in advance

•  Prequalify for a loan and compare offers carefully.

The Takeaway

If you’re considering a personal loan, it’s a good idea to take the time to compare the various options available and make sure you understand the terms and costs of a loan. Those with lower credit scores are likely to encounter fewer choices and higher interest rates and fees, while those with a strong financial profile may have a number of solid offers to choose among.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What is the monthly payment on a $10,000 personal loan?

The monthly payment on a $10,000 personal loan will fluctuate based on your credit score, the loan’s interest rate and fees, and the term of the loan, among other factors.

Do I need at least a 620 credit score to get a $10,000 loan?

There is no formal minimum credit score needed for getting a personal loan. Different minimums may apply across the various institutions that offer personal loans in the $10,000 range. Those with a 640 or higher credit score are likely to find a number of options for a $10,000 personal loan; those with higher scores may have more options as well as more favorable terms.

How long will it take to get a $10,000 loan?

Fast-funding options including same-day and next-day loans are common for 10,000 dollar loans. As long as you are prepared with some basic documentation that verifies your identity, address, and income, rapid approval and funding may be available.

Photo credit: iStock/Edwin Tan

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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A flex loan is a line of credit that is unsecured (meaning no collateral is required). It allows you to withdraw funds as needed up to a predetermined limit. As you pay down the balance, you can continue to borrow from the credit line, similar to a credit card.

While flex loans are usually easier to qualify for than more traditional lending products, they typically come with higher annual percentage rates (APRs) and fees. (Note: SoFi does not offer flex loans, but we do offer personal loans.) Here’s what you need to know about flex loans, including how they work, how much you can borrow, and the pros and cons of using a flex loan for fast cash.

What Is a Flex Loan?

Despite the name, a flex loan isn’t actually a loan — it’s an unsecured personal line of credit. Most commonly, you can find flex loans through cash advance companies, though some select credit unions, banks, and online lenders offer them.

Flex loans allow you to withdraw funds from a credit line up to a preapproved limit. You can use the funds in any way you wish. As you pay down the balance, you can continue to borrow from the credit line, similar to a credit card.

Because flex loans typically don’t require a credit check, they can be an attractive option for those who have a poor or limited credit history. But keep in mind: Because lenders assume additional risk by not checking credit, flex loans typically have higher APRs than other lending products, including personal loans, personal lines of credit, and credit cards. For this reason, you may struggle to make payments if interest and fees continue to accumulate.

How Do Flex Loans Work?

A flex loan works similar to a credit card in that it’s a revolving line of credit. Once approved, you’re given a certain credit limit and can borrow up to that amount. As the balance is paid down, that money is once again available to be borrowed.

You’ll receive regular statements showing how much you’ve borrowed and the interest owed, and typically need to make minimum monthly payments. Like a credit card, you may choose to pay only the minimum, or you can pay more. The more you pay each month, generally the less interest you’ll accrue.

Some flex loan lenders charge fees in addition to interest. This may include a flat fee when you take out the loan, as well as periodic fees, which may be daily, monthly, or each time you draw funds from the loan.

How Much Can You Get With a Flex Loan?

The exact amount you’ll be approved for will depend on the lender, as well as where you live, since state laws regulate credit limit amounts. You may be able to borrow anywhere from $100 to several thousand dollars with a flex loan.

Borrowers often turn to flex loans to cover immediate financial needs, emergencies, or hardships, but you can use the loan funds for almost any reason. However, due to the high APRs, it’s generally a smart idea to draw funds from a flex loan only when necessary.

Will a Flex Loan Hurt My Credit?

Getting a flex loan may not require a credit check so applying for one won’t necessarily affect your credit score. But lenders assume extra risk when they don’t do a credit check, so they might charge higher interest to make up for that.

A flex loan may hurt your credit if you don’t manage it responsibly. As with other types of debt, making late payments or missing payments on a flex loan may adversely affect your credit score. It’s a good idea to budget carefully to ensure you’re not borrowing more than you afford to pay back.

Recommended: Personal Loan Calculator

Benefits of Flex Loans

Flex loans may be beneficial for some borrowers. Here’s a look at some of the advantages of flex loans.

Application Process

•   In many cases, you can apply for a flex loan and receive a lending decision within minutes, especially if you apply online.

Access to Funds

•   You may receive access to your funds on the same day as your flex loan approval. Once approved, you can then make withdrawals from your credit line as needed. Funds are typically directly deposited into your bank account.

Credit Score

•   Most flex loan lenders won’t subject you to a credit check, making it less burdensome to qualify for a flex loan even if you don’t have good credit.

Requirements

•   In many cases, flex loans have more lenient requirements compared to other types of loans. In addition to giving the lender your personal details, you may only have to provide proof of employment and income.

Flexible Payment Terms

•   Each month or billing cycle, you can pay the minimum due or more. There are typically no penalties for paying down your debt faster.

Recommended: Typical Personal Loan Requirements Needed for Approval

Dangers of Flex Loans

Flex loans may be an attractive borrowing option because even those with poor credit can borrow money quickly. However, flex loans can present potential dangers.

Interest Rates

•   Flex loans typically carry much higher APRs than traditional lending products like personal loans and credit cards. If you can get a flex loan through a credit union, APRs can range from 24% to 28% or higher. If you get one from a cash advance company, the APR on a flex loan can reach triple digits.

Minimum Payments

•   You have the option to pay only the minimum payments on your flex loan. But if that’s all you pay, fees and interest will continue to grow your debt, making it increasingly harder to pay off the entire balance.

Excessive Debt

•   It can be tempting to borrow money repeatedly with a flex loan, but doing so can come at a high cost. If you continue to borrow money and don’t have a plan to pay down the amount you owe, a flex loan can lead to a cycle of debt that can be hard to break out of.

Risk of Predatory Lending Practices

•   It’s worth noting that some lenders can charge what are considered predatory interest rates, as high as 280% APR vs. an interest rate of, say, 20% you might pay on a credit card. This means borrowers run the risk of being mired in fast-rising debt.

Pros and Cons of Flex Loans

Here’s how the pros and cons look in chart form:

When Should You Take Out a Flex Loan?

A flex loan may be worth considering if you need quick access to cash and don’t want to go through a lengthy application process or can’t qualify for more traditional lending options. A flex loan may also be an option for those who want to have a backup source of funds in case of an emergency, like an unexpected car repair or dental bill.

However, because of the high APRs and added fees, you generally want to consider a flex loan only after exhausting other borrowing options, such as personal loans.

When to Apply for a Flex Loan

There may be other ways to get needed cash without paying interest rates as high as flex loans tend to offer. But if you’ve exhausted all other options, even a loan from a pawn shop, and you have a plan to repay the loan at the lowest possible cost to you, it may be an option you could pursue.

Emergency Expenses

Unfortunately, emergency situations can be part of life. Perhaps you need a major car repair or get hit with a huge dental bill. Or your home’s heating system conks out in the middle of winter. If you don’t have enough in an emergency fund to cover this kind of expense and other financing isn’t available, a flex loan might be an option.

Temporary Cash Flow Gaps

There are times when you may have issues with money coming in and going out. Perhaps you are in between jobs, or you are a seasonal worker and it’s the off-season. In these situations, you may want to access a flex loan to cover bills that need paying.

Alternatives to Flex Loans

Before applying for a flex loan, you may want to consider the following alternatives.

Personal Loan

Even if you have a limited credit history or bad credit, you may still qualify for a personal loan, albeit with a higher interest rate than those with solid credit would likely be offered. It can be worthwhile to see what terms various lenders offer you in this scenario.

Credit Cards

Like flex loans, credit cards are a form of revolving credit you can draw from on a recurring basis. While interest charges for credit cards can be high, they tend to be lower than flex loans. Depending on the card, you may also have an annual fee and other fees based on your use of the account.

Other Options

Here are a couple of other alternatives to a flex loan:

•   Personal line of credit: If you have healthy credit, a personal line of credit may be a worthy alternative because of its typically lower interest rates. However, you will be subject to a credit check, and the application process may take longer compared to a flex loan.

•   Personal loan with a guarantor: If you’re unable to qualify for an unsecured personal loan due to a poor or limited credit history, you might consider asking a friend or family member to help you get a guarantor loan. A guarantor is legally responsible for the repayment of the loan if the borrower defaults, but has no legal claim to any property the funds were used to purchase.

•   Payday alternative loans (PALs) are offered by federal credit unions and may provide an option for a small amount of short-term funding. Interest rates are typically capped at 28%.

Also explore if your employer offers any programs to advance your pay, whether cash advance apps could help, or if a buy now, pay later purchase could help you through a time when money is tight. One last consideration: You might ask a friend or family member for a loan.

Recommended: What Are Hardship Loans?

The Takeaway

Before taking out any type of loan, you’ll want to consider the benefits versus the costs. If you need cash for an emergency, it can be a good idea to look at all your borrowing options before settling on a flex loan due to the high interest rates and fees associated with these loans. (Note: SoFi does not offer flex loans, but we do offer personal loans.) Shopping around is a good way to see what you may qualify for and help you find a lender you feel comfortable working with.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What is a flex loan?

A flex loan is a form of revolving credit that allows you to withdraw funds up to a certain credit limit. As you pay down your balance, the funds become available to borrow again.

How much can you get with a flex loan?

Borrowing limits for flex loans will depend on the lender and where you live, since state laws regulate credit limit amounts. You may be able to borrow anywhere from $100 to several thousand dollars with a flex loan.

Will a flex loan hurt my credit?

Applying for a flex loan typically won’t affect your credit because lenders typically don’t do a credit check when you apply for the loan. However, lenders may report your borrowing activity to the major consumer credit bureaus. As a result, any late or missed payments could negatively affect your credit.

When should you avoid a flex loan?

There are a few scenarios when it can be wise to avoid a flex loan. One case is when the interest rates are excessively high; this can lead to getting deeper in debt. Also be cautious if you feel you don’t have good self-control when it comes to spending. A flex loan could be a path to owing more rather than repaying your debt.

Are there better alternatives to flex loans?

There can be better alternatives to flex loans. You might see what interest rate you are offered for a personal loan or how much it would cost to use a credit card. Or you could investigate payday alternatives loans (PALs), which are offered by federal credit unions at more favorable rates. Cash advance apps, employer paycheck advances, family loans, a personal loan with a guarantor, and buy now pay later purchasing can also be helpful options.

Photo credit: iStock/PeopleImages

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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A personal line of credit is a type of revolving credit line that can be used to pay for a variety of personal expenses. It works in a similar way to a credit card: A lender approves you for a specific credit limit, and you draw only what you need and pay interest only on the amount you use. This is different from a personal loan, which is a type of installment loan. With an installment loan, you receive a lump sum of money up front that must be repaid at specified intervals.

While both options allow you to borrow money, each comes with its own benefits and drawbacks. Continue reading for more information on personal lines of credit and when this type of financing may make the most financial sense.

What Is a Personal Line of Credit?

A personal line of credit is what’s known as a revolving credit vehicle. It’s similar to a credit card in that:

•  It has a maximum credit limit.

•  A minimum payment is required every month.

•  When the debt on the credit line is repaid, money can be withdrawn again.

Although a personal line of credit isn’t linked to a physical card, you can generally write checks, withdraw cash at an ATM, and transfer money into another account using the line. Generally speaking, the interest rates on a personal line of credit are lower than those on a credit card.

Personal lines of credit may be secured (requiring collateral) or unsecured (not requiring collateral). Whether secured or unsecured, some lines of credit require minimum payments of interest and principal, while others require only interest payments for a period of time, known as the draw period. That means that for a set period, you can draw money from your line of credit and need to make only interest payments during that time. After the draw period is over, the line of credit is no longer revolving (meaning, you can’t borrow against it anymore), and you’re typically required to make interest and principal payments.

Unlike personal loans, which tend to have fixed interest rates, a personal line of credit may have a variable rate during its draw period, then switch to a fixed rate once that period ends.

Recommended: Line of Credit vs. Revolving Credit

Where to Get a Personal Line of Credit

Personal lines of credit can be found at some banks, credit unions, and other financial institutions. However, not every lender offers them.

How to Get a Personal Line of Credit

The process for applying for a personal line of credit is usually similar to applying for other loans or credit cards. Lenders may accept applications online, in person, or over the phone, and specific application requirements may vary by lender.

Before formally applying, it’s a good idea to review your credit score and shop around at different lenders to compare the rates and terms you may qualify for. Many lenders will allow you to see if you prequalify, which may require a soft credit check, which won’t impact your credit score. Also be sure to evaluate any fees associated with the line of credit and review the draw period and repayment periods.

Once you’ve determined which loan you’d like to apply for, you’ll need to gather the required documentation (such as statements for proof of income). Your chosen lender will generally have a list of required documents. From there, you’ll fill out the application and wait for approval. At this stage, the lender will usually complete a hard credit inquiry which may temporarily impact your credit score.

When to Use a Personal Line of Credit

Personal lines of credit typically offer greater flexibility when it comes to accessing the loan and repaying it than other types of financing, such as a personal loan.

If you’re planning to do a home renovation, for example, you may not need a big chunk of money all at once. A line of credit allows you to access money over time to pay for things in dribs and drabs as you pick out the tile for your kitchen and your contractor finally gets around to installing it. This flexibility can reduce your interest charges because you are only borrowing money you plan to use immediately.

Another benefit of a line of credit is that you can pay it off and then typically borrow from it again. This can make it a good backup to have in case you suddenly experience an expensive emergency that you don’t want to put on your credit cards.

You may also be able to choose a line of credit with a draw period that allows you to only pay interest on the money borrowed for a period of time.

Awarded Best Online Personal Loan by NerdWallet.

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How a Personal Line of Credit Works

As we mentioned, personal lines of credit have a draw period and a repayment period. It’s important to understand how both work.

The draw period begins once you open a personal line of credit, and the funds are available for you to use as needed. You can borrow up to your credit limit, pay off the balance, and draw from it again. Your financial institution will likely send you a monthly bill, and you’ll need to make a minimum payment based on the amount you borrow, plus interest. (If you pay the balance in full each month, you may be able to avoid interest charges.)

The repayment period starts when the draw period ends. During this time, you won’t be able to borrow new funds. And you’ll likely be responsible for repaying the total amount you owe by the end of the repayment period.

Drawbacks to a Personal Line of Credit

One drawback is that unsecured lines of credit can be more difficult to qualify for than some other types of loans, such as a home equity line of credit (HELOC). This is because unsecured loans are generally more risky for the lender. Without collateral, the lender needs to be sure that the borrower has the ability to pay back their loan. That’s why for some, it may be easier to qualify for a HELOC (which uses your home as collateral) than a personal credit line. However, keep in mind that with a HELOC, you are taking on some additional risk by putting your house on the line.

Also, the flexibility that comes with a line of credit may be a double-edged sword. The ability to keep borrowing for an extended period of time could lead to feeling tempted to take on more debt or take longer to pay off debt… all of which could mean more interest charges over time.

Using a Personal Loan as a Personal Line of Credit Alternative

When comparing a personal line of credit vs. a personal loan, the major difference is that a personal loan is an installment loan. Like a personal line of credit, personal loans can be used to pay for nearly any personal expense. Borrowers receive a lump sum payment and pay back the loan in installments.

A personal loan may make more sense for borrowers who have a firm idea of their budget or a fixed expense, such as for medical bills, buying an engagement ring, or consolidating debt. Additionally, depending on creditworthiness, the average interest rate on a personal loan may be lower than that of a personal line of credit. Interest rates will vary by lender, so evaluate the options available to you.

Also compare any fees or penalties associated with the personal loan. If a personal loan has a prepayment penalty, you may not be able to benefit from paying off the personal loan early.

Recommended: Alternatives to Personal Loans

Other Personal Line of Credit Alternatives

•  HELOC: With a home equity line of credit, borrowers tap into the equity in their home to borrow a line of credit. This is a secured loan where the home functions as the collateral. This can help borrowers qualify for a more competitive interest rate than with an unsecured personal line of credit, but it also means that if the borrower has issues repaying the HELOC, their home is at risk.

•  Credit Card: In certain situations, a credit card may be used to help pay for emergency expenses. Be aware that credit cards generally have high interest rates — the average credit card interest rate was 24.04%, as of November 28, 2025.

•  Secured loans for a specific purpose: For example, if you are buying a car, you may be better off with a car loan over a personal line of credit or personal loan.

Personal Line of Credit vs Credit Card

A personal line of credit and a credit card both offer a pool of money you can borrow from and pay back over time. But there are key differences to keep in mind. Let’s take a closer look.

Flexibility and Usage

A credit card is designed for everyday convenience and can be a good fit for making small purchases like groceries, shopping, or dining out. To use, you just swipe or tap the card at a store or online checkout. Some credit cards may also earn cash back, points, or miles, which can be an added benefit.

A personal line of credit works more like a flexible bank loan. When you’re ready to use the funds, you might have the option to write a check, transfer the money to your bank account, or make a cash withdrawal. And unlike credit cards, PLOCs don’t typically earn rewards.

Interest Rate Differences

Credit cards tend to have higher interest rates than personal lines of credit. As mentioned, the average APR on credit cards is around 24.04% as of November 2025.

By comparison, the average APR on a personal line of credit is around 12.25%. Note that your credit score can impact the rate you receive for a personal line of credit. As a general rule, the stronger your credit score, the lower the rate you may qualify for.

The Takeaway

Personal lines of credit offer flexibility for borrowers because they are a revolving line of credit that functions similarly to a credit card. Borrowers can continue drawing on the line of credit for a set period of time to cover the cost of necessary expenses. For a one-time expense, however, you may be better off with a personal loan vs. a personal line of credit.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What is the difference between a personal loan and a personal line of credit?

The biggest difference between a personal loan and a personal line of credit is that a personal loan is an installment loan. Borrowers receive a lump sum payment and pay back the loan in fixed monthly payments. A personal line of credit, on the other hand, lets you borrow up to a set limit, and you pay interest only on the funds you use.

Does a personal line of credit affect your credit score?

Yes, a personal line of credit impacts your credit score. Opening a PLOC can cause a temporary dip in your credit score, but if managed responsibly, it can help build your score over time.

Can you pay off and reuse a personal line of credit?

Yes. During the draw period, you repay the money you borrowed, and those funds become available for you to borrow again, up to your approved credit limit.

What are typical interest rates for personal lines of credit?

As of November 2025, the average interest rate for a personal line of credit is around 12.25%. However, the rate you receive will depend largely on your creditworthiness.

Is a personal line of credit secured or unsecured?

A personal line of credit can be either unsecured or secured, though most are unsecured.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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