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 can be used for a variety of purposes, from paying off high-interest credit card debt to funding a home renovation.
Here, you’ll learn the full story on one popular option, a $10,000 personal loan.
Key Points
• A personal loan can provide a low-interest lump sum, which borrowers can use for various purposes, including debt consolidation and home renovations.
• Monthly payments for personal loans depend on factors like the loan amount, interest rate, and repayment term, with fixed or variable rates available.
• Typical requirements for qualifying include a credit score of at least 640, a steady income, and an active checking account, although options exist for those with lower scores.
• Fees, such as origination fees, can increase the overall cost of a personal loan, and borrowers should calculate the annual percentage rate (APR) for clarity on expenses.
• Fast processing times for personal loans are common, with many lenders offering same-day or next-day funding after approval, provided applicants have the necessary documentation.
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.
• Any other need for a cash infusion.
💡 Quick Tip: A low-interest personal loan from SoFi can help you consolidate your debts, lower your monthly payments, and get you out of debt sooner.
$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.
$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 may increase their interest rates if they think an applicant presents higher risk for timely repayment.
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.
| Principal | Interest Rate | Loan Term | Monthly Payment | Total Interest Paid |
|---|---|---|---|---|
| $ 10,000 | 6.0% | 24 months | $ 443.21 | $ 636.95 |
| $ 10,000 | 10.0% | 24 months | $ 461.45 | $ 1,074.78 |
| $ 10,000 | 6.0% | 48 months | $ 234.85 | $ 1,272.81 |
| $ 10,000 | 10.0% | 48 months | $ 253.63 | $ 2,174.04 |
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.
💡 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.
$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 12.17%.
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: Very Poor
• 580 to 669: Poor
• 670 to 739: Fair
• 740 to 799: Good
• 800 to 850: Excellent
There’s no single credit score needed for getting a personal loan. Keep in mind that $10k loan represents an average personal loan amount (the current average is $11,548). 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 credit score of 640 to qualify for a personal loan. If you have bad credit (say, in the lower “poor” or “very poor” range), you might still be able to secure a loan, but potentially at a higher interest rate.
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 that exceeds 640, an active checking account, and a steady, verifiable income, among other factors.
Top $10,000 Personal Loan Lenders
| Lender | Minimum Credit Score | APR Range | Loan Amounts |
|---|---|---|---|
| SoFi | None | 8.99% to 25.81% | $5,000 to $100,000 |
| LightStream | 660 | 8.49% to 25.49% | $5,000 to $100,000 |
| Upstart | None | 6.40% to 35.99% | $1,000 to $50,000 |
| Discover | 660 | 7.99% to 24.99% | $2,500 to $40,000 |
| Upgrade | 560 | 8.49% to 35.99% | $1,000 to $50,000 |
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. A $10,000 personal loan is close to the average amount borrowed currently, which indicates that these loans are typically accessible. Those with less-than-perfect credit are likely to encounter significantly fewer choices and higher interest rates and fees.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
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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