Medical expenses

How to Get a $2,000 Loan

Our experts answer readers’ personal loan questions and write unbiased product reviews (here’s how we assess personal loans). In some cases, we receive a commission from our partners; however, our opinions are our own.

  • Small loans can be harder to get than some larger loan amounts. 
  • A $2,000 loan can help with expenses such as debt consolidation, medical bills, and car payments.
  • You may still be able to take out a $2,000 personal loan with bad credit, but you would pay a higher interest rate. 

A $2,000 loan can help with anything from debt consolidation to moving expenses, medical bills, and car repairs. While it might seem counterintutive, you could possibly find it more difficult to get a small personal loan than a larger one. That’s because smaller loans are less profitable, causing many lenders to steer clear of them.

However, there are some financial institutions that do offer personal loans for small amounts. If you’re in need of a bit of extra cash, here’s how you can secure a $2,000 loan. 

See Insider’s picks for the best small personal loans >>

Compare Personal Loan Rates

How to get a $2,000 loan

Banks, credit unions, and online lenders offer loans of varying amounts for a variety of purposes. But in order to get approved, you’ll need to meet your lender’s qualification requirements. The most common lender requirements include:

  • Credit score and history: Lenders often want your credit score to be in at least the mid-600s. They’ll also review your credit history for possible “red flags,” such as late payments, bankruptcy, various new lines of credit, or maxing out your cards. Any of these can significantly hurt your chances of getting approved for a $2,000 personal loan. 
  • Income and employment: In order to prove that you have the means to repay your loan, lenders will want proof of employment and monthly income. You can provide this with documents including pay stubs, W-2 forms, tax returns, or a letter from your employer. A job verification letter should include crucial information like when you were hired, salary, and job title. 
  • Debt-to-income (DTI) ratio: A DTI ratio measures how much of your monthly income goes toward paying debts. You can calculate your DTI ratio by dividing your gross monthly income by your monthly debt payments (such as credit cards, car payments, student loans, and other loan payments). Try to keep your debt-to-income ratio at 36% or lower. A 43% DTI ratio is considered OK.

Get prequalified for a $2,000 loan

Before submitting a formal application, you can prequalify for a $2,000 loan and compare estimated rates, fees, and loan terms from multiple lenders. Plus prequalifying doesn’t affect your credit score. 

Lenders review your basic financial and personal information, such as income, employment status, monthly debt payments, and the purpose of your loan. They will also perform a soft inquiry on your credit, which has no impact your score. 

However, prequalifying doesn’t guarantee you’ll be approved for your loan. The formal approval process for taking out a personal loan is more in-depth, and lenders may catch something they didn’t during the prequalifying process. You’ll also have to agree to a hard credit inquiry, which will probably reduce your credit score slightly for a short time.

How to qualify for a $2,000 loan with bad credit

When it comes to getting approved for a personal loan, credit scores are extremely important. The better your score, the better chance you have of getting approved for a loan with a low-interest rate. Most lenders require borrowers to have a minimum score of around 670, which is considered a “fair” score. Nowadays, it’s easier than ever to check your credit score for free

Borrowers with bad credit scores, such as those with scores of 580 or under, will have the most trouble getting approved for a $2,000 loan. There are some lenders that specialize in approving loans for bad credit, but they often charge high-interest rates.  

If you have a bad credit score, credit union personal loans may be the best option as they tend to be more flexible. The National Credit Union Administration caps the APRs they can charge on loans at 18%.

Best $2,000 loan offers

If you’re looking to take out a $2,000 loan, here are some lenders worth considering:

Upgrade Personal Loan

Upgrade has some of the lowest APRs options available, with rates ranging from 8.49% to 35.99%. However, only borrowers with the best credit score can qualify for Upgrade’s lowest rates. Still, the minimum score to qualify for an Upgrade Personal Loan is 580. 

It offers loans as small as $1,000 and as large as $50,000. Loan terms range from two to seven years, and you’ll pay a $10 origination fee. 

PenFed Credit Union Personal Loan

PenFed Credit Union offers loans from as little as $600 with rates ranging from 7.74% to 17.99%. You need a credit score of at least 580 to qualify. 

PenFed does require borrowers to be a PenFed member either through previous or active military service or a PenFed savings account, which requires a $5 minimum deposit. 

Avant Personal Loan

Avant is best for borrowers with credits as low as 600 looking to take out a loan as little as $2,000 Avant rates range from 9.95% to 35.99%. Borrowers with lower scores are more likely to get charged a higher APR. Avant also charges multiple fees, such as an administration fee of up to 4.75%. 

Best Egg Personal Loan

Borrowers with very good to excellent credit scores are best for a Best Egg Personal Loan as it offers one of the lowest APRs with rates between 8.99% to 35.99%, and quick access to funds.

However, it does charge an origination fee between 0.99% and 5.99% and requires a credit score of 680.  

Navy Federal Credit Union Personal Loan

You can get a loan of as little as $250 with Navy Federal with rates ranging from 7.49% to 18.00%. It doesn’t require a minimum credit score to be approved. Instead, Navy Federal may weigh other qualifications requirements (such as your DTI ratio) more heavily. 

Similar to PenFed, you must be a Navy Federal member to join. Active military or veterans are eligible to join, as well as employees of the Department of Defense.

Alliant Credit Union Personal Loan

Alliant is best for borrowers looking for shorter repayment terms and no origination or late payment fees. It offers rates ranging from starts at 10.99%. It has an unspecified minimum credit score. 

Alliant requires a membership to take out a loan. To qualify, you can work with one of the organizations Alliant partners with, be a family member of an Alliant member, or work in a community near the credit union’s corporate headquarters in Illinois.

See Insider’s picks for the best personal loans >>

How to get a $2,000 loan FAQs

It may be hard to get a $2,000 loan as many financial institutions don’t think small loans are worth making. But there are a fair number of lenders that do offer smaller loans. As long as you meet a lender’s qualification requirements, such as the minimum credit score and low DTI ratio, it shouldn’t be too hard to get approved for a $2,000 personal loan. 

The monthly cost of a $2,000 loan can differ based on the regular annual percentage rate (APR) and the terms of your loan. For example, a $2,000 loan with a 10% interest rate over two years would cost you $92.29 per month. But the same amount with the same rate over five years would cost you $42.49 per month. 

How fast or slow it takes to get a $2,000 loan depends on the lender. Some lenders can get you your money the same day you are approved, while others may take a few days. In general, there’s no guarantee on how fast or slow you’ll get your loan. 

Should you take out a $2,000 loan?

You may think it would be easier to get approved for a $2,000 loan versus a larger loan, but it’s actually the opposite. Most banks, credit unions, and online lenders prefer to lend out larger loans to justify the service fees and profit from margins. But still, there are options for folks seeking a small personal loan. 

You may benefit from a $2,000 loan if you have a high credit score, a low DTI ratio, and a reliable source of income. But keep in mind that just because your loan is small, that doesn’t mean there are no consequences. Paying your monthly loan payments, getting a good rate, and spending your money wisely is key. You have to pay your loan back in full, so don’t exceed your spending limits or spend too quickly. Borrow only what is necessary and don’t commit to unreasonable monthly payments. 

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Fallout College