Payday loans are also called cash advance loans, deferred deposit loans, post-dated check loans, or check advance loans. They are short-term, high-interest loans. People who use these loans tend not to have access to other types of lending, and this is a last resort to get them through to the next paycheck.
Many states consider these loans predatory because of their high interest rates and financing fees. Some states place caps on the fees and interest rates or ban this type of lending completely.
Read on to find out what a payday loan is, how they work, and other options for those who need a short-term loan or cash advance.
Key Points
• Payday loans are short-term, high-interest loans typically for $500 or less.
• Borrowers must be 18 years old, have a checking account, and provide proof of income.
• Loans are repaid on the next payday, usually through direct debit or a post-dated check.
• High interest rates and fees can trap borrowers in a cycle of debt.
• Alternatives to payday loans include credit cards, cash advance loans, TSP loans, and personal loans.
What Is a Payday Loan?
Payday loans, also known as cash advances, are high-interest, short-term loans, typically for $500 or less. They are notorious for having very high interest rates and fees. There are few payday loan requirements, but borrowers typically need to be over 18, have a checking account in good standing, and show that they earn a secure income.
Consumers can find these types of loans through online lenders, apps, and local brick-and-mortar merchants. The loan amount is typically paid back by direct debit once the borrower receives their next paycheck. Alternatively, loans may be secured with a post-dated check.
How Does a Payday Loan Work?
Consumers fill out an application with a lender and show proof of identity, a recent pay stub, and a bank account number if required.
Borrowers have to secure the loan with a post-dated check or agree to have the funds debited from their account when they are paid, usually in two weeks. Loans are usually between $50 and $1,000, and funds are deposited within a day or two. Borrowers can also receive cash.
People with bad credit and access to better financing tend to use these loans to help them get by temporarily. However, payday loan problems are well-known: High interest rates and exorbitant fees can trap someone in spiraling debt if they cannot repay the loan on time.
The Consumer Financial Protection Bureau states, “More than four out of five payday loans are re-borrowed within a month, usually right when the loan is due or shortly thereafter.” Borrowers then face even higher financing fees and interest rates compounding their debt load.
Many states place caps on the interest rates and fees charged for payday loans; some states, such as New York, have outlawed them completely.
What Are the Requirements for a Payday Loan?
Most working adults qualify for a payday loan. Here are the most common standards.
Age
Borrowers must be at least 18 years of age.
Proof of Income
Applicants have to show proof of income, such as a pay stub.
Citizenship
Consumers may have to show proof of U.S. citizenship.
Bank Account
Borrowers need to have a bank account that is in good standing.
Payday Loan Interest Rates
Depending on the state, interest rates for payday loans can carry a 400% annual percentage rate (APR) or more.
In states that cap interest rates on payday loans, lenders may instead charge a fee that is a percentage of the amount loaned. Finance charges can be between $15 and $30 for each $100 borrowed.
Payday Loan Amounts
Payday loan amounts are usually $100 to $1,000. In some states, a borrower is allowed only one payday loan at a time. Other states, like Texas and Nevada, offer unlimited payday loans for customers.
Alternatives to a Payday Loan
Rather than take out a high-interest payday loan, there are better options for people in a precarious financial situation.
Credit Cards
If the borrower has a credit score, using a credit card is a safer bet than a payday loan. The average credit card interest rate is around 21%, while payday loan interest can be over 400%. However, if the borrower needs the cash to pay bills such as rent or utilities, that is often not possible with a credit card.
Cash Advance Loans
A cash advance loan puts cash immediately into your bank account. These loans are offered by online lenders, such as Earnin. These companies don’t charge loan financing fees but ask for “tips.” So, a borrower might tip between 5 and 15% of the advance. These apps are often marketed as payroll benefits, and they charge membership and service fees.
TSP Loans
A TSP account is a tax-deferred retirement savings and investment plan that offers Federal employees the same tax advantages as a 401(k) retirement plan. If you have a TSP retirement account, you can take out a loan from that plan without having to pay tax or penalties. However, you must pay the amount back to the account within five years with interest (which will be much lower than the interest on a payday loan).
Personal Loans
For consumers with a good credit score, banks and online lenders offer unsecured or secured personal loans. Unsecured loans are not backed by any collateral and will have a higher interest rate than a secured loan, but not as high as a payday loan.
Unexpected expenses can be paid for with a personal loan and at a lower interest rate. Many people take out personal loans to pay off credit card debt because the interest rate on a personal loan is less than the interest rate paid on their credit card debt. Getting approved for a personal loan can be easier if you have good credit.
Loan payback terms can be between two to seven years, with loan amounts typically between $1,000 and $50,000 or higher. If you manage the payments on a personal loan responsibly, you can build up a strong credit history. That is not the case with a payday loan, which is not typically reported to credit rating bureaus.
The Takeaway
Payday loans are short-term loans that cash-strapped consumers use to get by until their next paycheck. The borrower is expected to repay the loan on their next payday, or they may submit a post-dated check. Interest rates are extremely high because of the risk to the lender that the borrower will default. Unfortunately, this is often the case, and borrowers can find themselves spiraling into debt as interest and fees accumulate. For this reason, some states have banned payday loans.
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.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
FAQ
What are the requirements to get a payday loan?
Most working adults qualify for a payday loan. A borrower needs to be 18 or over, show proof of income (a paystub) and citizenship, and have a bank account.
Is proof of income a requirement for a payday loan?
A lender requires proof of income because they want to know you have the means to pay the loan back. A recent pay stub or similar documentation is typically enough.
Is taking out a payday loan a good idea?
Basically, no. A payday loan should only be used as a last resort, and if you are sure you can pay back the loan in two weeks. Even then, the interest you will pay will be much higher than a cash advance or a short-term loan from an online lender.
SoFi Loan Products
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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Legal fees can get expensive. Whether you need to hire an attorney for a divorce case, to represent you against criminal charges, or to guide you through the adoption process, the cost can be prohibitive — but that doesn’t mean you should move forward without legal counsel.
Instead, there are a few different ways to pay for a lawyer, including personal loans. We’ll review how to get a loan for legal fees, as well as other options available to you.
Key Points
• Personal loans can cover legal fees, providing access to legal help despite financial constraints.
• Personal loan interest rates and fees vary by lender and are often higher for borrowers with bad credit.
• Credit cards, payment plans, and crowdfunding offer alternative methods to cover legal fees.
• Pros of personal loans include fixed monthly payments and potentially lower costs compared to credit cards.
• Cons include high interest rates with bad credit and the risk of financial strain from additional monthly payments.
What Are Loans for Legal Fees?
While you cannot find a loan designed specifically for legal fees, you can take out a personal loan to cover your legal costs. If your lawyer mentions taking out a loan for payment, they’re likely referring to a personal loan.
How Do Loans for Legal Fees Work?
Personal loans for legal fees work much like any other personal loan. You borrow a sum of money, and pay it back — with interest — over a period of time.
Loan rates and terms vary by financial institution. In general, the longer the loan term, the higher your annual percentage rate (APR) will be. However, because the repayment is spread out over more years, the monthly payments tend to be lower. Personal loan terms usually range between two and seven years.
When you get a personal loan for legal fees, you’ll get the lump sum from the lending institution to pay your lawyer. Some banks offer same-day funding. Then, rather than owing the lawyer, you’ll owe the lender until the loan is paid off in full.
Keep in mind that, in addition to interest, some personal loans include origination fees and prepayment penalties.
Typical Legal Loan Requirements
When you go to apply for a personal loan, the lender may have a few requirements you’ll have to meet. These may vary by financial institution.
Credit Score
A key factor in getting approved for a legal loan is your credit score. In general, the higher your credit score, the better your chances of approval and at a lower interest rate.
The credit score you need for a personal loan will vary by institution. Some lenders may even grant personal loans to borrowers with bad credit. In those cases, fees and APRs are typically very high.
Speaking of your credit score, most lenders offer soft pulls for personal loans to see if you’re qualified. But once you apply, expect a hard inquiry on your credit report, which will temporarily lower your score.
Debt-to-Income Ratio
Lenders also factor in your debt-to-income (DTI) ratio when considering your loan application. Your DTI ratio is the total amount of your monthly debts (think car payment, student loan payments, credit card bills, mortgage, etc.) divided by your monthly income.
The lower your DTI ratio, the better your chances of getting approved for a personal loan for legal fees with favorable rates and terms.
Proof of Income and Employment
To get a legal fee loan, you’ll need to demonstrate your ability to repay it to the lender. That means that lenders may want to see proof of income and employment, such as a signed letter from your employer, pay stubs, and/or W-2 forms.
Some lenders charge a loan origination fee when you take out a personal loan. This is a one-time fee at the start of the loan that covers the administrative costs of processing the loan. (If you’ve ever bought a house, you likely paid a mortgage origination fee as part of your closing costs.)
Personal loan origination fees might be flat fees or a percentage of the loan amount. Not every lender charges these fees.
Collateral
Loans for legal fees are usually unsecured personal loans, meaning they’re not backed by any collateral. Other examples of unsecured loans are traditional credit cards and student loans, where you can borrow money without putting up assets as collateral. Because there’s no collateral, fees and interest rates tend to be higher.
In some instances, personal loans can be secured, meaning you’d have to put up some kind of collateral, like a car or house. Secured personal loans may have lower fees and interest rates, but costs vary by lender.
If you get a secured personal loan for your legal fees, you’ll need to offer some kind of collateral to the lender.
Pros and Cons of Using a Loan to Cover the Cost for Legal Fees
Thinking about using a personal loan to cover legal fees? Here are the pros and cons to consider:
Pros of Legal Fee Loans
Cons of Legal Fee Loans
You get access to the legal help you need, even if you can’t afford it right now.
You’ll pay more over time because of interest and fees.
Personal loans for legal fees may be cheaper in the long run than paying with a credit card.
Interest rates are typically high if you have bad credit.
You can often get same-day funding.
Your budget may be strained with another monthly payment to manage for several years.
Unlike credit card APRs, personal loan interest rates are usually fixed; you can count on the same monthly payment until it’s paid off.
Missing a payment can have financial consequences.
Unsecured loans don’t require collateral, so you don’t have to put your house or car at risk.
You may be overlooking cheaper alternatives, like a payment plan through the law office or crowdfunding online.
How Legal Fees Are Billed
Legal fees can run the gamut. Your attorney may charge you several types of fees during the course of their representation. Here’s a quick look at some of the fees you might incur when hiring a lawyer:
• Hourly fees: A lawyer will likely charge you by the hour for their services — and that’s not just the hours you spend consulting with them. Lawyers do a lot of work on your case behind the scenes, and they’ll bill you for it. Hourly rates can range from as little as $100 an hour to as much as several thousand dollars an hour, depending on the lawyer’s experience, the complexity of the case, and geographic location. The average hourly rate for a lawyer in 2024 was $341, according to the Clio 2024 Legal Trends Report.
• Flat rates: Sometimes, a lawyer might charge you a simple fixed fee for a specific service. This is typically for less involved work (i.e., no court representation). For instance, they may charge a set rate to prepare your will or help you with a real estate transaction, bankruptcy filing, or uncontested divorce.
• Contingency fees: As the name implies, these fees are contingent. You’ll only pay them if you win your case and are awarded a monetary sum. Often, a lawyer’s contingency fees are a percentage of that sum.
• Litigation fees: Your lawyer may include this as a line item on your invoice, but really, it’s a catch-all for several fees. These include court filing fees, attorney’s fees, expert witness fees, fees for re-creating an accident or accessing records, copy fees, and others.
Alternatives to Legal Loans
A legal loan is not your only option for covering legal fees. If you don’t want to take out a personal loan or don’t qualify, consider these other options. Just make sure to steer clear of predatory lending.
Credit Cards
Many lawyers accept credit cards as a payment method for their services. If that’s your preferred payment method, ask a lawyer if they accept credit card payments. If they say no, keep looking for a different option.
Just keep in mind that credit cards may have higher interest rates than a personal loan. Check your credit card’s APR to calculate how much you might owe in interest if you don’t pay off your credit card balance quickly.
Legal Payment Plans
Some law offices may offer payment plans to their clients. In this case, you would pay your lawyer in monthly installments rather than in one lump sum.
While not every lawyer offers this option, it never hurts to ask. This is another question you can ask upfront before hiring a lawyer.
Crowdfunding
Asking friends and family for financial help is never easy, but loved ones may chip in if you’re in a bind.
Alternatively, you can seek a wider net of potential benefactors by crowdfunding on social media or using official crowdfund platforms. Just keep in mind that such platforms often keep a percentage of the funds as payment.
The Takeaway
Whether you’re adopting a child, getting a divorce, fighting criminal charges, or suing a person or business as a victim, enlisting the help of a lawyer can give you peace of mind. But it will cost you — the average lawyer charges $341 an hour. The good news is, you have options when it comes to paying for costly legal fees, including paying with a credit card, going on a payment plan with your attorney, or asking loved ones for the money. A personal loan may also be a worthwhile avenue to explore.
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.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
FAQ
Is it legal to take out a loan for legal fees?
Yes, it is legal to take out a loan for legal fees. Legal funding loans are simply personal loans that you take out with a lender to cover the cost of hiring a lawyer.
Can legal fees be tax deductible?
If you’re a business owner who incurs legal fees for your business, you can deduct the cost on your taxes. This applies to property owners who incur legal fees when renting out their property to tenants. In addition, legal fees related to adopting a child are tax-deductible through the federal adoption tax credit.
Can legal fees be paid in installments?
Many law firms offer payment plans to their clients that allow them to make payments in installments. If your lawyer doesn’t offer this and you can’t pay out of pocket, you can also look for a legal finance loan (a personal loan) to cover the cost. While you’ll pay the lawyer in a lump sum, you’ll pay off the loan in installments.
Photo credit: iStock/Andrii Yalanskyi
SoFi Loan Products
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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
A personal loan is a type of loan offered by many banks, credit unions, and online lenders, and there are an array of options to suit different needs. Personal loans typically don’t specify how you can use the lump sum of cash you receive, which means the money could go toward anything from medical debt to wedding costs to home renovation expenses.
Deciding which kind of personal loan best suits your needs can depend on such factors as how much money you plan to borrow, how soon you plan to pay it back, and your creditworthiness and income. To make the best selection, learn more about the different types of personal loans available.
Key Points
• Personal loans offer flexible funding for expenses like medical bills and debt consolidation.
• Unsecured loans do not require collateral but may have higher interest rates and stricter approval criteria vs. secured loans.
• Fixed rate loans provide consistent monthly payments, while variable rate loans have fluctuating interest rates.
• Other types of personal loans can include vacation loans and wedding loans.
• Key factors to consider when evaluating personal loan options include the interest rate, repayment timeline, and whether collateral is required.
1. Unsecured Personal Loan
A common type of personal loan is an unsecured personal loan. This means there’s no collateral required to back up the loan, which can make them riskier for lenders. Approval and interest rates for unsecured personal loans are generally based on a person’s income and credit score, but other factors may apply. In terms of how your credit score impacts a loan, you can expect higher credit scores to snag more favorable (or lower) interest rates.
2. Secured Personal Loan
Unlike an unsecured loan, there is some sort of collateral backing up a secured personal loan. For example, think of it working in the same way a home mortgage does — if the borrower does not make payments, the bank or lender can seize the asset (in this case, the home) that was used to secure the loan.
In terms of accessing this kind of personal loan, collateral could include such assets as:
• Cash in the bank
• Real estate
• Jewelry, art, antiques
• A car or boat
• Stocks, bonds, insurance policies
Since secured loans involve collateral, lenders often view them as less risky than their unsecured counterparts. This can mean that secured personal loans might offer a lower interest rate than a comparable unsecured loan.
Here’s a comparison of some of the features of unsecured and secured personal loans:
Unsecured Personal Loan
Secured Personal Loan
No collateral needed
Requires an asset to be used as collateral
May have higher interest rates than secured personal loans
May have lower interest rates than unsecured personal loans
Approval typically based on applicant’s income, credit score, and other factors
Approval typically based on value of collateral being used, in addition to applicant’s creditworthiness
Funds may be available in as little as a few days
Processing time can be longer due to need for collateral valuation
A personal loan with a fixed interest rate will have the same interest rate for the life of the loan. This means you’ll have the same fixed payment each month and, based on your scheduled payments, can know upfront how much interest you’ll pay over the life of the loan. This can help people budget appropriately as they put funds towards the common uses for personal loans, such as a major dental bill or travel plans.
4. Variable Rate Loan
On the other hand, the interest rate on a variable-rate loan may change over the life of the loan, fluctuating based on the prevailing short-term interest rates. Typically, the starting interest rate on a variable-rate loan will be lower than on a fixed-rate loan, but the interest rate is likely to change as time passes. Variable-rate loans are generally tied to well-known indexes.
If you’re trying to decide on a variable- or fixed-rate personal loan, this summary might be helpful (you might also consider crunching the numbers using a personal loan calculator):
Variable Interest Rate
Fixed Interest Rate
May have lower starting interest rate than a fixed-rate personal loan
Interest rate remains the same for the life of the loan
Monthly payment amount may vary during the loan’s term
Monthly payment amount will not change
Might be desirable for a short-term loan if current interest rate is low
May be a better option if predictable payments are desired for a long-term loan and/or interest rates are rising
Maximum interest rate may be capped
Potential to cost more in interest payments over the life of the loan if interest rates drop
5. Debt Consolidation Loan
This type of personal loan refinances existing debts into one new loan. Ideally, the interest rate on this new debt consolidation loan would be lower than the interest rate on the outstanding debt. This would allow you to spend less in interest over the life of the loan.
With a debt consolidation loan, you may only have to manage one single monthly payment versus, say, paying multiple credit card bills. This streamlining of monthly debt payments can be another major perk of this type of loan.
6. Cosigned Loan
If you’re struggling to get approved for a personal loan on your own, there are circumstances in which you can apply for a loan with a cosigner. A cosigner is someone who helps you qualify for the loan but does not have ownership over the loan. In the event that you are unable to make payments on the loan, your cosigner would, however, be responsible.
Co-borrowers and co-applicants are other terms you might hear if you’re interested in borrowing a personal loan with the assistance of a friend or family member.
• A co-borrower essentially takes out the loan with you. Unlike a cosigner, your co-borrower’s name will also be on the loan, so they’d be equally responsible for making sure payments are made on time.
• A co-applicant is the person applying for a loan with you. When the loan application is approved, the co-applicant becomes the co-borrower.
Some credit cards offer the option to borrow cash against the card’s total cash advance limit. Doing so is called taking a credit card cash advance. The available cash advance amount may be different than the total available credit for purchases — that information is typically included on each credit card statement.
Depending on the credit card company’s policy, there are a few ways to secure a cash advance: You could use your credit card at an ATM to withdraw money, borrow a cash advance from a credit union or bank, or request a cash advance from the credit card company directly.
Cash advances typically have some of the highest interest rates around, higher still than your regular annual percentage rate (APR). There are often additional credit card fees associated with a cash advance transaction. Check your credit card disclosure terms for full details before taking a cash advance.
8. Medical Loan
A medical loan is usually an unsecured loan that can be applied to medical expenses, such as out-of-pocket costs, copays, hospital bills, and the fees for emergency and elective procedures, among others. You can often find them through banks and online lenders, and they may offer features that make them appropriate for those recovering from health issues, such a period of 0% interest. Check the terms carefully, though, to make sure you understand what interest rate will be charged after the introductory period.
You may also see family planning loans, which help cover the cost of fertility and IVF expenses.
9. Vacation Loan
Hoping to take a big trip with your partner to Paris? Or dreaming of going to Disney with your toddler and your parents? A vacation loan is a kind of personal loan that is designed to fill that need. When you want to travel, have an adventure, or get away from it all but don’t have the cash, this sort of loan provides financing.
As with other personal loans, you’ll need to qualify based on your credit history, income, and other factors.
10. Wedding Loan
Wedding loans are a kind of personal loan designed to finance the big day. These are typically unsecured installment loans that can help a couple pay for their venue, catering, music, photography and videography, flowers, decor, and the wedding dress and rings.
You receive the lump sum of cash, and then pay it back over time, with interest.
The Takeaway
Personal loans can offer a source of cash to be used in a variety of ways. There are various kinds of loans available, such as secured and unsecured, variable and fixed interest rate, and more. Doing research on these different sources of funding can help you make an educated decision about whether a personal loan is right for you and, if so, which type suits your needs best.
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.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
FAQ
How many types of personal loans are there?
There are many different types of personal loans. Some popular options include secured vs. unsecured (meaning no collateral is needed) loans; fixed- vs. variable-rate loans; and personal loans designed for specific purposes, such as a debt consolidation, medical, or credit builder loan.
How much is a $20,000 loan for 5 years?
The cost of a $20,000 loan for five years will depend on a variety of factors, such as the interest rate and whether it’s fixed or variable. As an example, a personal loan of $20,000 for 5 years at a fixed rate of 8% would have a monthly payment of $472 for a total repayment of $23,584, meaning you’d pay $3,584 in interest over the life of the loan.
What is the largest personal loan I can get?
How large a personal loan you can get will usually depend on your credit score, income, and debt-to-income (DTI) ratio. Many lenders offer personal loans at up to $40,000–$50,000, but some may approve loans for up to $100,000 or even higher if a prospective borrower qualifies.
Is a personal line of credit the same as a personal loan?
A personal line of credit is different from a personal loan. With a personal loan, you receive a lump sum of cash and then make installment payments to repay it over time. With a personal line of credit, you are approved up to a certain credit limit, and you can then borrow against and pay back the debt with interest over time, much like a credit card.
Are certain types of personal loans easier to get than others?
Some personal loans may be easier to get than others. For instance, a secured loan can be easier to obtain since it requires collateral, which the lender knows they can claim if the borrower defaults. Also, personal loans for small amounts (say, $1,000) can be easier to obtain than larger sums. It’s also worth noting that personal loans can be easier to get when you have a strong vs. a poor credit score.
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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.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
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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:
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.
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.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
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
SoFi Loan Products
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Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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It can be challenging to qualify for a personal loan after a bankruptcy, A bankruptcy will remain on your credit reports for up to seven to 10 years, but with effort, your credit scores can be built during that time and beyond.
If you are approved for a personal loan, you likely will pay fees or a higher interest rate than you might have without having a bankruptcy on your credit report.
Read on to learn how bankruptcy works, the pros and cons of filing for Chapter 7 vs Chapter 13 bankruptcy, and how to get approved for a loan with a bankruptcy in your credit history.
Key Points
• Bankruptcy remains on your credit report for up to seven to 10 years, but you can rebuild your credit during this time to improve your chances of getting approved for a personal loan.
• While it is possible to get a loan after bankruptcy, you may face higher interest rates and less favorable terms due to the bankruptcy on your credit report.
• Chapter 7 bankruptcy involves liquidation of assets to pay off creditors, while Chapter 13 bankruptcy allows for a repayment plan over three to five years to retain assets.
• Personal loans can typically be discharged in both Chapter 7 and Chapter 13 bankruptcy, with secured loans potentially leading to the loss of collateral.
• Improving your credit score, reducing your debt-to-income ratio, and maintaining a history of on-time payments can help increase your chances of loan approval after bankruptcy.
How Does Bankruptcy Work?
When a person can’t make payments on their outstanding debts, despite trying to do so, bankruptcy may be an option to have a fresh financial start.
Bankruptcy can be either a liquidation of the debtor’s assets to satisfy creditors or the creation of a repayment schedule that will satisfy creditors and allow the debtor to keep their property instead of liquidating it.
💡 Quick Tip: A low-interest personal loan can consolidate your debts, lower your monthly payments, and help you get out of debt sooner.
Filing for Bankruptcy
Bankruptcy petitions are filed with the bankruptcy court in the debtor’s judicial district. The process is mostly administrative, with minimal time spent in front of a judge — often no time at all unless there is an objection by a creditor. A court-appointed trustee oversees the case.
The debtor must attend a “341 meeting” (named for section 341 of the Bankruptcy Code), at which creditors can present questions and concerns. For Chapters 7 and 13 bankruptcies, which are being discussed here, the remainder of the process differs slightly.
Common Reasons to File for Bankruptcy
Among the reasons people may file for bankruptcy are the following:
It’s not impossible to get a loan after bankruptcy, but interest rates may be high and loan terms less favorable than for someone who hasn’t been through a bankruptcy. The negative effect a bankruptcy has on a person’s credit lessens over time, but lenders may not be willing to offer their best rates to someone they perceive as not having been financially responsible in the past.
Factors That Impact Loan Approval After Bankruptcy
There are a few forces that impact getting approved for a loan after bankruptcy:
• Credit score and history. A bankruptcy can lower your credit score by 100 or 200 points, which can make it challenging to build credit to the level needed to qualify for a personal loan or a loan with a favorable rate.
• Timing. As noted, a bankruptcy can stay on your credit report for seven to 10 years. There can be a waiting period of one to two years or longer before you can qualify for a loan.
• Lender requirements. Different lenders have different guidelines. There are some who specialize in lending to those with poor credit.
• Type of bankruptcy. Some lenders may look more favorably upon those who have a Chapter 13 bankruptcy, which involves repayment of debt, vs. Chapter 7. (Learn more below.)
Two Main Types of Bankruptcy Filings
There are two main types of bankruptcy available to individuals, Chapter 7 and Chapter 13. With both, typically a bankruptcy trustee reviews the bankruptcy petition, looks for any red flags, and tries to maximize the amount of money unsecured creditors will get.
Chapter 7 is the most common type of bankruptcy for individuals, followed by Chapter 13.
Chapter 7 Bankruptcy
This is often called liquidation bankruptcy because the trustee assigned to the case sells, or liquidates, nonexempt assets in order to repay creditors.
Many petitioners, though, can keep everything they own in what is known as a “no-asset case.” Most states allow clothing, furnishings, a car, money in qualified retirement accounts, and some equity in your home if you’re a homeowner to be exempt from liquidation. (Each state has a set of exemption laws, but federal exemptions exist as well, and you might be able to choose between them, a subject a bankruptcy attorney should be able to provide insight on.)
After the bankruptcy process is complete, typically within three to six months, most unsecured debt is wiped away. The filer receives a discharge of debt that releases them from personal liability for certain dischargeable debts.
Are Personal Loans Covered Under Chapter 7?
In most cases, personal loans may be discharged in a Chapter 7 bankruptcy proceeding. A secured personal loan for which collateral has been pledged is included in discharged debts, but the asset put up as collateral will likely be sold to satisfy the debt.
A Chapter 7 bankruptcy can create a fresh start for someone struggling to repay their debts, but it’s not a magic wand. Here are some pros and cons:
Pros of Chapter 7 Bankruptcy
Cons of Chapter 7 Bankruptcy
Debtors are free of personal liability for discharged debts.
Some types of debt, such as student loan or tax debt, cannot be discharged.
Certain assets may be exempt from bankruptcy, giving the debtor some property to sustain themselves.
A trustee takes control of the debtor’s assets.
If all of a debtor’s assets are deemed exempt, the bankruptcy is termed a no-asset bankruptcy.
Creditors will not receive any funds from the bankruptcy because there won’t be any assets to liquidate.
Chapter 13 Bankruptcy
This form, aka reorganization bankruptcy or a wage earner’s plan, allows petitioners whose debt falls under certain thresholds to keep their assets if they agree to a three- to five-year repayment plan.
There are three types of claims in a Chapter 13 bankruptcy: priority, secured, and unsecured. The plan must include full repayment of priority debts. A trustee collects the money and pays the unsecured debts, with the individual debtor having no direct contact with the creditors. Secured debts can be handled directly by the debtor.
Once the terms of the plan are met, most of the remaining qualifying debt is erased.
The U.S. Bankruptcy Code specifies that if the debtor’s monthly income is less than the state median, the plan will be for three years unless the court approves a longer period. If the debtor’s monthly income is greater than the state median, the plan generally must be for five years.
Certain debts can’t be discharged through a court order, even in bankruptcy. They include most student loans, most taxes, child support, alimony, and court fines. You also can’t discharge debts that come up after the date you filed for bankruptcy.
Are Personal Loans Covered Under Chapter 13?
Personal loans can be discharged in Chapter 13 bankruptcy, but whether a creditor is likely to be repaid in full depends on if the personal loan is secured or unsecured. Priority claims are paid before any others, followed by secured, then unsecured claims.
The Pros and Cons of Chapter 13 Bankruptcy
Debtors who have assets they’d rather not have liquidated might opt for Chapter 13 bankruptcy vs. Chapter 7, which involves liquidation of most assets. But like any type of bankruptcy, there are pros and cons.
Pros of Chapter 13 Bankruptcy
Cons of Chapter 13 Bankruptcy
Debtors may be able to save their assets, such as their home, from foreclosure.
If the repayment plan is not followed, the bankruptcy could be converted to a liquidation under Chapter 7.
Debtors may opt to make payments directly to creditors instead of through the trustee.
Living on a fixed budget for the duration of the repayment plan will take some adjustment.
Debtors have more options to repay their debts than they might under Chapter 7.
Chapter 13 bankruptcy is more complex than Chapter 7, and may lead to higher legal costs.
Debtors can extend repayment of secured, non-mortgage debts over the life of the plan, likely lowering their payments.
Taking more time to repay the secured installment debt may lead to more interest before it’s paid in full.
A bankruptcy will be considered a negative entry on your credit report, but the severity depends on a person’s entire credit profile.
Someone with a high credit score before bankruptcy could expect a significant drop in their credit score, but someone with negative items already on their credit reports might see only a modest drop.
The good news is that the negative effect of the bankruptcy will lessen over time.
How Long Bankruptcy Stays on Your Credit Report
Lenders who check credit reports will learn about bankruptcy filing for years afterward. Specifically:
• For Chapter 7, up to 10 years after the filing.
• For Chapter 13, up to seven years.
Still, filing for bankruptcy doesn’t mean you can’t ever get approved for a loan. Your credit profile can be positively impacted if you stay up to date on your repayment plan or your debts are discharged — among other steps that can be taken.
You may even be able to begin building your credit during bankruptcy by making the required payments on any outstanding debts, whether or not you have a repayment plan. Of course, everyone’s circumstances and goals are different so, again, always consult a professional with questions.
Some lenders may specialize in offering loans to people who have a bankruptcy on their record (though rates and terms may be less favorable). That said, some lenders may deny credit to any applicant with a bankruptcy on a credit report.
How Long After Bankruptcy Discharge Can I Get a Loan?
As long as you can find a lender willing to approve you for a loan, there is no specific amount of time needed to wait until applying for one. Often, waiting one or two years will be enough. However, your credit report will reflect a discharge for seven to 10 years, and lenders may not offer favorable terms or interest rates.
Should I Apply for a Loan After Bankruptcy?
Making sure you are in a stable financial situation after bankruptcy is a good idea before thinking about applying for a loan at that time. Having a repayment plan that you can stick to before taking on more debt is imperative. That being said, taking out a loan and repaying it on time and in full can be a good way to help rebuild your credit.
Some pointers:
• Before applying for an unsecured personal loan, meaning a loan is not secured by collateral, it’s a good idea to get copies of your credit reports from the three major credit reporting agencies: Equifax®, Experian®, and TransUnion®. Make sure that your reports represent your current financial situation and check for any errors.
• If you filed for Chapter 7 bankruptcy and had your debts discharged, they should appear with a balance of $0. If you filed for Chapter 13, the credit report should accurately reflect payments that you’ve made as part of your repayment plan.
• Consider getting prequalified for a personal loan and comparing offers from several lenders. They will likely ask you to supply contact and personal information as well as details about your employment and income.
• If you see a loan offer that you like, you’ll complete an application and provide documentation about the information you provided. Most lenders will consider your credit history and debt-to-income ratio, among other personal financial factors.
• You may want to think carefully before considering “no credit check” loans: They typically have high fees or a high annual percentage rate (APR).
💡 Quick Tip: Fixed-interest-rate personal loans from SoFi make payments easy to track and give you a target payoff date to work toward.
If You’re Approved for a Personal Loan
Before you sign on the dotted line, it’s smart to take the following steps:
Read the Fine Print
If you’ve had a bankruptcy on your record, the terms of your offer may be less than favorable, so consider whether you feel like you’re getting a reasonable deal.
People with credit scores considered poor might see APRs on personal loans running into the triple-digits. Make sure you are clear on your interest rate and fees, and compare offers from different lenders to make the choice that works for you.
Avoid Taking Out More Than You Need
You’re paying interest on the money you borrow, so it’s generally better to only borrow funds that you actually need. Further, it’s probably wise to only take out as much as you can afford to repay on time, because paying on time is an important key to rebuilding your credit. Having a focused plan for what you’ll spend the personal loan funds on may give you some incentive to manage it responsibly.
Awarded Best Online Personal Loan by NerdWallet.
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If You’re Not Approved for a Personal Loan
If you are denied a personal loan, don’t despair. You may have options for moving forward:
Appealing to the Lender
You can try to explain the factors that led you to file for bankruptcy and how you have turned things around, whether that’s a record of on-time payments or improved savings. The lending institution may not change its mind, but there’s always a possibility the lender can adjust its decision case by case.
You likely have the best chance at an institution that you’ve worked with for years or one that is less bound to one-size-fits-all formulas — a local credit union, community bank, online lender, or peer-to-peer lender.
Looking Into Applying With a Co-signer
A co-signer who has a strong credit and income history may be able to help you qualify for a loan. But both parties should keep in mind that the co-signer is typically responsible for paying back the loan if the primary borrower can’t do so.
Building Your Credit
You may need to take some time to try to build your credit profile before reapplying for an unsecured personal loan. You still have a chance to work toward reducing your other debt. There are many types of personal loans available, and a little waiting time to consider what’s right for you isn’t a bad thing.
There are several important habits to adopt when building your credit, but the most important one is your payment history, meaning whether you pay bills on time. This contributes 35% to your credit score, so it’s wise to be diligent about it as you move past bankruptcy. Setting up autopay can be a good move as it ensures you won’t accidentally pay a bill late or miss it.
Alternatives to Personal Loans After Bankruptcy
If you don’t qualify for a personal loan after bankruptcy or feel that’s not the best option, here are other ways to access credit and/or build your credit score:
• Secured credit cards, which involve putting down a deposit that usually serves as your credit limit.
• Secured loans, in which collateral (such as a savings account or a vehicle) is needed and can lessen the lender’s risk.
• A loan from a trusted friend or family member.
The Takeaway
Getting approved for an unsecured personal loan after bankruptcy isn’t impossible, but it may take some time to qualify and your rates and fees will likely be less favorable. It’s a good idea to compare offers from several lenders and gauge whether it’s the right time to borrow.
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.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
FAQ
Can I get a loan with a discharged bankruptcy?
Yes, it is possible to get a loan after bankruptcy, but it may take time and the rates and terms may be less than favorable.
Are personal loans covered under Chapter 7?
Yes, personal loans can be discharged under Chapter 7 bankruptcy.
Are personal loans covered under Chapter 13?
As with Chapter 7, personal loans can be discharged under Chapter 13 bankruptcy, typically after the court-approved repayment period of three to five years. Secured personal loans will take priority over unsecured personal loans, however.
How long after bankruptcy discharge can I get a loan?
There is no set time a person must wait in order to apply for a loan after bankruptcy discharge. Each lender will have its own conditions for approval. However, a typical period might involve waiting one to two years.
What are the best ways to rebuild credit after bankruptcy?
To build credit after bankruptcy, it’s wise to be especially diligent about paying bills on time, every time, since that’s the single biggest contributing factor to your score. You also want to be cautious about your credit utilization rate when you are able to access credit again, and not apply for too many forms of credit at one time.
SoFi Loan Products
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.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
This article is not intended to be legal advice. Please consult an attorney for advice.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
