Medical expenses

How to Get a Loan for $20000


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  • A $20,000 personal loan can help you afford medical bills, home renovations, and other expenses.
  • You must meet all of your lender’s qualification requirements get approved for a $20,000 loan 
  • Try to not exceed your spending limits or spend too quickly, and be sure to borrow only as much as is necessary.

A $20,000 loan can go a long way to helping you afford to pay for some big expenses, such as a home remodeling project or medical bills that aren’t covered by insurance. 

It can be more difficult to get larger loans, especially if you don’t have good credit or meet the income and other qualifications that many lenders require to get approved.

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

Here’s how you can get approved for a $20,000 loan from a credit union, bank, or online lender. 

How to get a $20,000 loan

Larger loans are riskier for lenders. They may require you to meet stricter qualifications for a $20,000 loan in order to ensure you’re able to repay it in full. Here are a few examples: 

  • Credit score and history: The higher your credit score, the better your chances of getting approved for a loan. Most lenders require a credit score that is at least in the mid-600s. A credit score between 670 and 739 is considered a “good” score, according to FICO. Having bankruptcies, various new lines of credit, maxed-out credit cards, or late payments in your credit history may hurt your chances of getting approved. 
  • Income and employment: You’ll need to show proof of employment and income to prove that you have the means of repay your loan. You can use documents including pay stubs, W-2 forms, tax returns, or a job verification letter with details such as hire date, salary, and job title to verify your employment.
  • Debt-to-income (DTI) ratio: A DTI ratio measures the amount of your income that goes toward paying debts. A DTI ratio of 36% or lower is ideal, but 43% may also be an acceptable level in some instances. You can calculate your debt-to-income ratio by adding up all your debt payments (including student loans, car payments, and credit card debt) and dividing it by your gross monthly income. 

Be sure to have all the necessary financial and personal documents ready before you apply for a $20,000 loan. It’s also worth calculating your debt-to-income ratio and reviewing your credit score so you have a better idea of where you stand. 

Get prequalified for a $20,000 loan

Most lenders offer pre qualification as a way to estimate the rates and terms they can offer without affecting your credit score. Pre qualifying for a $20,000 loan with multiple lenders allows you to compare interest rates and other factors like loan types, term lengths, and any fees they charge.

Lenders can scan through basic qualification requirements, such as household income, current employment status, Social Security number, DTI ratio, and the purpose of your loan. If nothing sticks out as a “red flag” you may be considered a good candidate for a loan. Lenders may also perform a soft credit inquiry, which won’t hurt your credit score. 

However, there is a chance that during the full application and approval process, a lender may catch something they didn’t when you prequalified. You’ll also have to agree to a hard credit inquiry, which can temporarily reduce your credit score.

Next step: See if you’re prequalified for a loan without impacting your credit score.

How to qualify for a $20,000 loan with bad credit

Credit scores play a huge part in helping you get approved for a loan. A bad credit score or credit history can significantly hurt your chances of getting approved, especially for larger loans.

Borrowers with good to excellent credit often get the lowest interest rates. But the reverse can be said for folks with bad credit scores. A “poor” credit score is considered 580 or under. Most lenders require at least a “fair” score of around 670. Most credit card companies will let you check your check your credit score for free anytime you check your log on to your account online.

You can still qualify for a loan with bad credit, but you’ll pay a lot more. Even if you qualify for one of the best loans for bad credit, you’ll get a much higher interest rate than someone with good credit. Credit union personal loans are often more flexible and could be a good choice if you don’t have great credit. The National Credit Union Administration caps the APRs on loans at 18%.

$20,000 loan offers

There are plenty of personal loan options out there for folks shopping around for a good deal on a $20,000 loan. Here are some options worth considering:

LightStream Personal Loan

LightStream offers one of the lowest annual percentage rates (APRs) compared with other lenders and is best for borrowers with excellent credit scores looking to take out a loan for debt consolidation, home remodeling, or medical debt. It requires a minimum credit score of 660 and doesn’t charge additional fees. 

Its APRs range from 7.99% to 24.99% (with AutoPay discount, rates vary by loan purpose). 

SoFi Personal Loan

SoFi is a good option for folks with at least a 680 credit score and an annual income of $100,000 or more (according to the loan comparison site Credible). Similar to LightStream, SoFi offers competitive APRs, no additional fees, and additional benefits like unemployment protection. 

You can take out a loan as low as $5,000 and as high as $100,000, so a $20,000 loan is more than doable with SoFi. SoFi doesn’t offer in-person support for borrowers. And you may be able to get a better rate from LightStream if you have an “excellent” credit score (a score of at least 800).

SoFi offers loan rates ranging from 8.99% to 25.81% (with all discounts).

Wells Fargo Personal Loan

If you’re looking for in-person support, Wells Fargo offers around 4,700 locations throughout the country. It’s best for borrowers who are already Wells Fargo customers. You can get approved for a loan of as much as $100,000. Plus, you won’t be charged an originating fee or prepayment penalty fee. But non-Wells Fargo customers can’t apply for a loan online. 

Wells Fargo does charge significant late fees and has a history of legal violations involving mortgages, deposit accounts, auto loans, and more. 

Wells Fargo loan rates range from 7.49% to 23.74% (with relationship discount).

PenFed Credit Union Personal Loan

If you have a low credit score, PenFed Credit Union may be a good option for you. Although PenFed is mainly recommended for small loans, you can request a loan of up to $50,000. The minimum credit score requirement for PenFed is 580 and you must be a PenFed member or savings account owner to qualify. Becoming a member simply requires opening a PenFed savings account with a $5 minimum deposit. 

PenFed loan rates range from 7.74% to 17.99%.

Avant Personal Loan

Avant is best for borrowers with a credit score as low as 600 and is looking to take out no more than $35,000. But the lower your credit score, the higher the APR Avant is likely to offer. The lender also charges multiple fees, like a up to 4.75% in administration fees with an undisclosed late fee and returned payment fee.

Avant offers interest rates ranging from 9.95% to 35.99%.

Upstart Personal Loan

Upstart is best for folks with very low credit scores looking to take out a loan of up to $50,000. Usually, Upstart is recommended for borrowers looking to get a small loan, such as a loan of $1,000. But if you have very bad credit and you’re in desperate need of a loan, Upstart may be worth considering. You can qualify with a credit score as low as 300.

Its maximum APRs are on the higher side of what’s available in the market. Upstart may also charge you origination fees and late fees. Keep in mind that residents of Massachusetts, Ohio, New Mexico, and Georgia have higher loan minimums than other US states. 

Upstarts rates range from 4.60% to 35.99%. 

How to get a $20,000 loan FAQs

The monthly cost of a $20,000 loan can vary greatly based on the annual percentage rate (APR) and the terms of your loan. For example, a $20,000 loan with an 8% interest rate over 12 months would cost you $1,739.77 per month. But the same amount with the same rate over three years would cost you $488.26 per month. 

It can be hard to get a $20,000 loan if you don’t meet all of a lender’s qualification requirements. Folks with low credit scores, high DTI ratios, or are currently unemployed may have a hard time qualifying. If your score is too low, you can apply to lenders that specialize in approving loans for those with low credit scores, or you can take steps to improve your score

Generally, a good to excellent credit score is recommended for larger loans, as a high-interest rate on a large loan amount can very quickly escalate your financial situation. Even if you’re able to get approved for a $20,000 personal loan with fair or bad credit, you may be charged a very high interest rate that could potentially cost you thousands. 

A good credit score, according to FICO, ranges from 670 to 739, and a very good score is between 740 to 799. An excellent credit score ranges from 800 to 850.

Should you take out a $20,000 loan?

There are many reasons you may need to take out a $20,000 loan. Personal loans are a great way to help you afford medical bills, major life events, home renovations, or consolidate other debts. If you’re serious about taking out such a large loan, make sure you meet all qualification requirements before applying. You may not want to taking out a large loan if you don’t have good credit.

 



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