Large personal loans are typically defined as those in the range of $50,000-$100,000. Like personal loans of all denominations, the lump sum received for a personal loan can be used however you like: to pay off medical debt, say, or finance a major home renovation. They typically do so at a lower interest rate than would be charged if you used a credit card.
To understand whether this kind of loan is right for you, whether you would qualify for one, and how to apply, read on.
Key Points
• Large personal loans typically range from $50,000 to $100,000 and are used for medical debt, home renovations, and consolidating debts.
• A strong credit score, typically 750 or higher, can improve approval chances and secure better loan terms.
• Stable employment ensures a consistent income, increasing the likelihood of loan approval and favorable terms.
• A low debt-to-income ratio, under 36%, is preferred, reducing the risk of default and enhancing loan terms.
• Benefits of a large personal loan can include manageable monthly payments and potential positive impact on a credit score, but risks involve negative credit impact and prepayment penalties.
What Is a Large Personal Loan?
A large personal loan is exactly what it sounds like — a loan for a lot of money. There is no specific figure that makes a personal loan cross over into that “large” territory. To one person, $50,000 might be a large personal loan. To another, it might be $100,000. But typically, it’s a number that’s well into the five-figures realm. Typically, lenders don’t offer more than $100K for a personal loan.
A large personal loan is a form of credit that can be used to make large purchases or consolidate other high-interest debts. Personal loans generally have lower interest rates than credit cards and are sometimes used to consolidate high-interest debt.
To start with the basics, a personal loan is defined as a set amount of money borrowed from a lending institution. Unlike a mortgage loan or auto loan, which is used for a specific purpose, funds from a personal loan can be used to pay for a variety of expenses such as medical bills, K-12 private education costs, or to consolidate multiple debts. Typically, however, you can’t use a personal loan for business expenses, and using personal loans for higher education tuition is usually prohibited.
How Do Large Personal Loans Differ From Other Personal Loans?
Personal loans function in the same way, no matter their size because they are borrowed sums of money that are paid back with interest. This is true regardless of the amount of money borrowed.
However, there are some differences between larger personal loans and their smaller counterparts depending on the lender you choose.
| Small Personal Loans | Large Personal Loans |
|---|---|
| Loan amounts approximately $1,000 to $5,000 | Loan amounts approximately $50,000 to $100,000 |
| Including fees, may not be cost effective compared to larger loans | With good to excellent credit scores, applicants may qualify for low interest rates |
| Typically have shorter repayment terms | Repayment terms are typically longer |
Interest Rate Considerations
You’ll likely want to compare personal loan interest rates. Different lenders may specialize in different sizes of loans, and their rates may vary depending on what they consider their “sweet spot,” so it can pay to shop around.
One key point: Don’t just look at the interest rate on a loan. The APY, or annual percentage yield, will give you a truer sense of what you will pay over the life of the loan. The APY includes fees (such as origination fees) and other factors, rolled in with the interest rate.
Term Length Options
The length of the loan term will impact your payments in a couple of ways. First, a longer loan period typically means you will have a lower monthly payment, which can be helpful in terms of your budget and cash flow.
However, a longer loan term also usually means you are paying more in interest over the life of the loan. Consider your options carefully to make sure you are getting the right deal for your situation.
How long do you usually have to pay off a personal loan? Two to seven years is common for personal loans in general, and, for larger loans, you may find terms of 10 or even 12 years.
When Is a Large Personal Loan a Bad Idea?
A large personal loan may be a bad idea if you already struggle with your current debts or monthly expenses.
When considering financing, it’s important to know both the pros and cons of a personal loan. Whether a loan is a right choice for you depends on your unique financial situation. Here are some of the risks to consider:
• If you fall behind on payments, your credit score could be negatively affected.
• If you miss enough loan payments, your large personal loan may go to a collections agency. Some lenders will charge off a debt, meaning they gave up on being repaid, but you’re still legally responsible for the debt.
In the right situation, however, a large personal loan can be helpful. If you’re approved for the loan, you’ll have the funds to make a big purchase and can repay it over time. Those smaller, monthly installments mean that the burden is more manageable.
Top Uses for Large Personal Loans
One of the best features of personal loans is that they can be used for almost any purpose. Among the common uses of personal loans that are considered large are:
• Medical debt
• Home renovation projects
• Debt consolidation
• Wedding expenses
• Vacations
What Are Common $100,000 Loan Qualification Requirements?
Typically, lenders have stricter requirements to qualify for a larger loan than one with a smaller limit.
Credit Score
Generally, you need a minimum credit score of 670-720 to qualify for a $50,000-$100,000 loan. However, it may be ideal to have a score of 750 or above in order to get approved. Depending on your score, your lender may offer you varying loan terms.
Checking your credit report before applying for any loan is a good idea. You will be able to find any errors or discrepancies and have an opportunity to correct them before you begin applying for a loan.
Checking your credit score counts as a soft inquiry and doesn’t negatively impact your credit score. The Fair Credit Reporting Act guarantees you access to one free credit report from each of the three major credit bureaus, and these are currently available weekly. You can find yours at AnnualCreditReport.com.
Recommended: Does Checking Your Credit Score Lower Your Rating?
Employment Status
One of the factors your lender will consider is your employment status. They want to see how much income you earn and if you have the resources to repay the loan. In addition, the lender wants to be assured of your job stability. It may be a good idea to avoid making any sudden career changes while you’re applying for a loan.
Debt-to-Income Ratio
Your debt-to-income ratio (DTI) is a number that compares the total amount of debt you owe per month to your monthly earnings. You can find yours by taking your total recurring monthly debt and dividing it by your gross monthly income. Your recurring debt includes your mortgage, student loans, and other loans, and your gross income is everything you earn before taxes or other withholding.
Lenders use this number to help them predict a borrower’s ability to repay current and future debt. In general, lenders look for a DTI under 36%, but borrowers with a higher DTI may be approved if they are well qualified in other areas.
Assets and Collateral
As your application is reviewed, you may need to show assets in addition to a strong income and credit history. Assets include such things as real estate, cash in the bank, investments, vehicles, and art, antiques, and jewelry.
If you are getting a secured loan, meaning it involves collateral which can be claimed by the lender if you default, then these assets could help qualify you for that type of financial product.
What Is the Application Process for a Large Personal Loan?
Applying for a personal loan is a multi-step process. Different lenders may have different processes, but typical steps are as follows.
Compare Rates
Some lenders may offer loan prequalification. This allows you to see, based on a soft credit check, potential average personal loan interest rates and terms you might qualify for. It can be a good way to compare your lending options and find the best offer.
Gather Documents
As you move ahead with your personal loan application, collect all the paperwork you need.
Approaching this step proactively will help you streamline your application process, saving you time. It will also make it easier for your lender to review your eligibility and creditworthiness.
Personal loans usually require similar documents, no matter the lender, though. A few you should include are:
• Proof of identity such as a driver’s license or passport.
• Proof of current address such as a current lease agreement, utility bill, or proof of insurance.
• Verification of stable income and employment such as W-2s, bank statements, paystubs, or tax returns.
Waiting for Approval
Once you submit all the necessary paperwork, the last thing to do is wait. Approval times vary between lenders and may be quick or lengthy depending on how complicated the application is. Some approvals happen within a day, while others may take up to 10 days.
After your lender approves your large personal loan, you’ll receive it in the form of a lump sum. Lenders may deduct any fees, such as origination fees, before disbursing the loan proceeds. A personal loan calculator can help you estimate your loan payments.
💡 Quick Tip: Just as there are no free lunches, there are no guaranteed loans. So beware lenders who advertise them. If they are legitimate, they need to know your creditworthiness before offering you a loan.
What Can You Expect When Repaying Your Loan?
Regular installment payments begin once your large personal loan is approved and you receive the funds. The loan agreement will state the loan terms, interest rate, and what each payment will be, in addition to other details about the loan.
Monthly Payment Examples
Here are a few numbers to note that help you see how your loan payment might vary:
• For a $50K loan at 7% APY and a 5-year term, your monthly payment would be $990.06
• For a $50K loan at 9% APY and a 5-year term, your monthly payment would be $1,037.92
• For a $50K loan at 9% APY and a 7-year term, your monthly payment would be $804.45
• For a $100K loan at 7% APY and a 5-year term, your monthly payment would be $1,980.12
• For a $100K loan at 9% APY and a 5-year term, your monthly payment would be $2,075.84
• For a $100K loan at 9% APY and a 7-year term, your monthly payment would be $1,608.91
Early Repayment Options
Paying off a large personal loan early can help you save a bundle on interest. You might do this with a lump sum payment (say, you have a windfall such as an inheritance) or you could adopt a biweekly payment schedule to speed up your paying off the debt.
While uncommon, some large personal loans may have prepayment penalties. Check the fine print or contact your lender to learn more.
Can You Borrow $100,000 if You Have Bad Credit?
While it might not be impossible, borrowing a large loan with bad credit won’t be easy. Lenders tend to favor low-risk borrowers who are more likely to repay their loans on time and in full. A strong credit history provides some assurance that a borrower will do that. But poor credit or no credit at all may look to lenders like a likelihood to default.
Lenders willing to loan to borrowers with bad credit typically require different data to evaluate their application, however. For example, they might ask the borrower to show a history of utility payments or information from their bank account. Lenders may also limit borrowing amounts and charge higher interest rates to applicants with bad credit.
Additionally, borrowers with poor credit can improve their chances by opting for a secured personal loan, one for which they pledge collateral to guarantee the loan, as noted above. This may work well for someone who struggles with credit but has assets and sufficient income to make loan payments. If the borrower defaults on the loan, the lender has the right to seize the asset pledged as collateral.
Are There Alternatives to Large Personal Loans?
After some research, you might decide a personal loan isn’t right for you. Or, you may struggle to get the level of financing you want. In that case, there are alternatives to a personal loan. For example, you could consider these choices if you have equity in your home or other real estate:
• Cash-out refinancing: A cash-out refinance allows you to replace your existing mortgage with a new, larger loan. After the original mortgage is paid off, you can use the difference as you like. This option works best if you have a significant amount of equity built up in your home and have a high credit score.
• Home equity loan: Like a cash-out refinance, a home equity loan depends on your built-up home equity. However, it is a second, additional, mortgage, rather than one new mortgage. By borrowing against your equity, the loan has collateral behind it, making it a secured loan.
• Home equity line of credit (HELOC): Like a home equity loan, you use your home equity to access a HELOC. It acts as a line of credit you can tap into when you need it, and you only pay interest when you borrow. This works best for a homeowner who needs smaller amounts of money over a longer-term, rather than just one lump sum.
• 401(k) loans: If you have a 401(k) plan, you may be able to borrow money from your retirement account. Depending on your plan’s specifics, you might be able to borrow up to 50% of your account’s vested balance or $50,000, whichever is less. If your balance is less than $10,000, you may borrow up to the full amount. Then, you pay the funds back with interest within a period (usually five years).
• Securities-based loans: Another option could be a securities-based loan, often called a securities-based line of credit, or SBLOC. In this case, a lender allows you to borrow up to a certain percentage (say, 70% to 90%) of the value of stocks, bonds, or other non-retirement assets. The assets pledged as collateral are held in a separate account, and you are charged interest as you use your line of credit. Fees are typically quite low.
The Takeaway
A large personal loan is one that is typically in the range of $50,000-$100,000. It can allow you to pay off debts or make significant purchases. However, it may require a high credit score, a solid employment history, and other factors to qualify, and it can bring its own set of pros and cons as well.
Finding the right large personal loan for your financial needs and situation may take some time, but comparing lenders is a good way to get started.
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’s the highest personal loan amount I can get?
Typically, the highest personal loan amount is $50,000-$100,000, though some lenders may offer up to $200,000 for some borrowers.
How long does it take to get approved for a large personal loan?
The time it takes to get approved for a large personal loan can vary. In some cases, it could happen within a day; in others, it might take a couple of weeks.
Do all lenders offer $100,000 personal loans?
Not all lenders offer $100,000 personal loans. Some do; others offer large loans up to $20,000-$50,000; and still others only offer loans up to, say, $5,000 or less.
What happens if I default on a large personal loan?
If you default on a large personal loan, your debt can be turned over to collection and your credit score can be negatively affected.
Can I get a large personal loan with a co-signer?
Yes, you can get a large personal loan with a co-signer from some lenders. In some cases, a co-signer with a strong income and/or credit history could help you qualify.
About the author
Ashley Kilroy
Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.
Photo credit: iStock/vladans
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