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Personal loans can be an important financial tool. They typically allow borrowers to access funds to spend as they see fit, with few exceptions, and do so at a lower interest rate than would be charged if they used a credit card.

To be more specific, with money from a large personal loan, you could cover higher-cost expenses like a single, substantial expense or several smaller debts consolidated into one large one. For example, If you plan to purchase a used car or some land to build on in the future, you might choose to finance it with a personal loan. Or perhaps you want to eliminate your credit card debt, buy a new laptop, and pay off the bill for some dental work. Those could also be paid off with a single, more substantial personal loan.

To help you understand whether a large personal loan could be the right next step to suit your needs, read on.

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.

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 or higher education tuition.


💡 Quick Tip: Some lenders can release funds as quickly as the same day your loan is approved. SoFi personal loans offer same-day funding for qualified borrowers.

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.

Average personal loan interest rates may change depending on the size of the loan.

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.

What Are Common $100,000 Loan Qualification Requirements?

Typically, lenders have stricter requirements to qualify for a large loan than one with a smaller limit.

Credit Score

Generally, you need a minimum credit score of 720 to qualify for a $100,000 loan. However, it’s ideal to have a score of 750 or above. 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 annually. 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.

What Is the Application Process for a Large Personal Loan?

Getting approved 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 interest rates for your personal loan and terms you might qualify for. It can be a good way to compare your lending options and find the best offer.

Gather Documents

Applying for a loan requires several documents. Before completing 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.

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. 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.

The Takeaway

A large personal loan is one that is typically in the range of more than $50,000. 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. Not every lender offers large personal loans. If you are looking for a sizable loan, consider SoFi Personal Loans, which range from $5,000 to $100,000 for eligible applicants.

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.

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.

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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.

No one wants to deposit a check that is fake or that bounces. That can trigger fees, not to mention frustration. Verifying a check can help protect you in this situation.

Perhaps you have received a check from someone you don’t know well, or the check appears odd, or you are simply aware of the fake check scams out there and prefer to be cautious with your bank deposits.

To help you avoid counterfeit checks, learn how to verify a check here. This can help cut down on the likelihood that you will be involved with fraudulent activity or simply a check that bounces.

What Is Check Verification?

Check verification is a process in which the payee, or recipient of a check, confirms that the check is valid and good. In other words, you are making sure that the check can be cashed, that it is not fraudulent, and that it will not bounce and trigger fees.

At a time when there’s a significant amount of fraudulent activity and fees, this can be a valuable process, saving you time, energy, and cash.

Verifying a Check

If you’re curious about how to validate a check, know this: Banks must process check funds quickly, sometimes as fast as two days by law. The bank may say that a check has cleared and the funds are available for use, but this doesn’t necessarily mean that the check is valid.

It can take a few weeks to identify a fake check in some cases, and by that time it might be too late. You, the recipient, may have thought the funds were available and tried to use them.

To determine if a bank check or cashier’s check (vs. an electronic or e-check) is valid, consumers may have to do more than just a physical inspection of the check.

Here are a few ways to identify if a check is fake or valid.

•   Ensure a legitimate bank issues the check. Although a valid bank might issue some fake checks, a sure giveaway of a fake check is that a fake bank name is on it. To locate an FDIC insured bank in the US, consumers can use the FDIC BankFind Suite.

•   Call the bank the check is from. Look up the bank’s phone number on its website instead of using the phone number listed on the check. The number on the check might be a part of the scam, so it’s essential to call the official direct line to confirm the check’s validity. The bank might need the check number, issuance date, and amount to confirm if the check is real.

•   Complete an ABA routing number lookup. Developed by the American Bankers Association in 1910, the ABA routing number identifies the financial institution responsible for the payment. To make sure a check is valid, use a routing number lookup system for verification.

•   Take into consideration the origin of the check. If the check came from an unknown source, it’s wise to be skeptical of the payment. Scammers usually communicate via email or text message, which may contain grammatical errors.

•   Confirm the address the check was mailed from. If a check has a postmarked address that doesn’t match the issuing bank, it may denote a fake check. Be extra wary of any check that is sent from overseas.

•   Look for watermarks, security threads, or other security features printed on the check. If a scammer copies any of these features, the quality is often questionable.

•   Compare the check amount to the request. If the check amount is greater than the expected amount, this is a sign of a hoax the scammer may use to get the check receiver to wire funds back to them when the check is deposited.

Check Verification Services

If you receive a considerable number of checks on a regular basis (say, you run your own business), you might want to look into check verification services that help with this process.

If you hire one of these services, they can help you figure out if the check is likely to be good. They can reveal if the check comes from someone with a record of trying to pass off bad checks. They cannot confirm that a check is written against an account with sufficient funds, but they can help you avoid depositing a check from someone with a suspicious history.

4 Ways to Tell if a Check Is Fake

Wondering how to know if a check is fake? There may be some telltale signs that a check is bogus. Learn what to look for.

Feel the Check’s Edges

Legitimate checks will have one or more edges that are rough or perforated. If a check feels smooth all the way around, it could be fake.

Inspect the Paper

An authentic check is printed on thick, matte paper, not flimsy stock. Thin paper can indicate a fake check.

Double-check the Check Number

Check numbers appear in two places on legit checks: both the upper right-hand corner and on what’s known as the MICR, or the magnetic ink character recognition line at the bottom.

If the numbers don’t appear in both places and match, you could be holding a bogus check.

Zero in on the MICR Line

As mentioned above, the MICR line contains important information. If the printing there looks raised or shiny, the check could be fake. You could also run a damp finger over the printing. If it smears, sorry: The check is likely fake.

Verify the Bank Address

Checks should have the bank address printed right on it. You can compare this to the official bank address and make sure they match up. Also, a PO box as the bank address can be a red flag that the check is not authentic.

Verifying Funds on a Check

As you work to verify a check, it’s important to remember one thing: When you verify funds, that is not a guarantee that the money will be available when you go to cash the check. The funds may be available at that moment, but you cannot put a hold on the cash nor reserve it. When you actually deposit the check, it could bounce.

Unless the check is an authentic certified check or cashier’s check, there is still the possibility that it might not clear.

Recommended: How to Write a Check to Yourself

4 Check Scams to Look Out For

Although criminals are coming up with new bank fraud ploys all the time, there are a few current common scams to be aware of.

1. Get Rich Quick Scams

In this scam, the scammer contacts a check recipient and says that they won the lottery or are entitled to an inheritance, usually from another country. The scammer says they will send a cashier’s check with the proceeds, but the recipient must pay the fees and taxes. So, they are instructed to deposit the funds and wire money to the scammer for taxes and fees.

2. Online Auction Scams

Some scammers may visit an online auction site or classified listing site and bid on an item; pay in advance for a service; or rent an apartment. The scammer will then send a cashier’s check, usually for more than the price agreed upon. Once you bring this to their attention, they will request the recipient to deposit the check and then send the extra funds back to them before you find out the check was fake.

3. Secret Shopper Scams

With secret shopper scams, scammers pretend to have a job opportunity that allows employees to work from home. The scammer may send a check as a starting bonus and request the employee pay the activation fee. The hope is that the scammer receives the funds from the activation fee before the fake check bounces.

Another way secret shopper scammers take advantage of people is by hiring someone and stating their first assignment is to review retailers that sell gift cards. In this case, the shopper may get a check with instructions to deposit it into their account and then wire the funds to a third party. Unfortunately, once the funds are wired to someone else, the third party vanishes.

4. Personal Assistant Scams

Scammers sometimes try to hire personal assistants online. Once the scammer hires someone, the scammer may send a check and tell the new employer to use the money to purchase gift cards, supplies, or equipment for the client. After the scammer receives the gift card PIN, they can use the funds right away. This will leave the personal assistant without the money when the bank determines the check is counterfeit.

Taking Action If You’re Scammed

If you have wired funds to a scammer, reach out to the company transferring the money as soon as possible, reporting the fraud, and filing a complaint.

Two commonly used money transfer companies are Western Union™ and MoneyGram®, and both have departments dedicated to fraud awareness. If you think you may have been scammed, you can report suspected fraud to the money issuer by phone.

• Western Union Fraud Hotline at 1-800-448-1492.

• MoneyGram Customer Care Center at 1-800-926-9400.

Both companies also have online forms that can be used to report suspected fraud. You can request a transfer reversal and, while it’s unlikely they will do this, it’s essential to ask at least.

If you used a money order to pay the scammer, reach out to the money order issuing company. Ask if you can request a stop payment or if they can track the money order and stop the delivery of the money.

If you sent the money order by US mail, try reaching out to the U.S. Postal Inspection Service® or another service carrier you used.

In the event, the scammer requested gift cards, contact the gift card issuing company immediately and explain that the company’s gift cards were used in a scam. If you contact them quickly, they might be able to refund the money. Remember, gift cards are not a form of payment, they are a gift. So, it’s a red flag if someone is trying to pay you using gift cards.

Recommended: Ordering Checks – A Complete Guide

The Takeaway

While you can’t prevent fraudsters from attempting to steal your money, you can take steps to keep your money safe by using a secure bank account.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How can you verify if a check is valid?

There are several ways to verify if a check is valid, including confirming the bank information, checking the routing number, and inspecting the paper and ink.

Can you verify a check online?

There are ways to validate a check online in certain situations. For businesses that receive a significant number of electronic checks, or e-checks, online verification can be a tool that helps reduce the risk of depositing checks that will bounce.

What is a check verification system?

A check verification system is typically a business that verifies a bank account status in real time to determine if a check is drawn on a valid account. There are also systems consumers can use to verify a check, such as confirming the ABA number and inspecting the ink and the paper.

Photo credit: iStock/andresr

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.