By Caroline Banton ·February 22, 2023 · 7 minute read
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Personal loans used to be considered a last resort to resolve cash flow issues. Today, according to the U.S. Chamber of Commerce, personal loans are the fastest growing lending vehicle in the nation. Personal loans are appealing partly because of their flexibility. They can be used for almost any purpose, whether to fix up a home or consolidate credit card debt. Borrowers can receive anywhere from $1,000 to $100,000, choose a fixed or variable interest rate, even select the length of the loan.
Read on to find out more about how personal loans work, how to qualify, their advantages and disadvantages, and whether a personal loan is right for you.
What Is the Required Credit Score for a $15,000 Personal Loan?
You will likely need a credit score of at least 660 for a $15,000 personal loan. Many lenders don’t state a minimum required credit score because they will vary the terms for each borrower depending on their credit history. The higher your score, the more money you can qualify for and the better the interest rate.
Benefits of a $15,000 Personal Loan
A $15,000 personal loan is a sizable amount that can serve many purposes. Common personal loan uses include making large purchases, covering living expenses for a defined period, consolidating debt, and paying off a credit card with a higher interest rate. Here are some other benefits:
Interest Rates and Flexible Terms
There are many types of personal loans, and interest rates can be fixed or variable. The interest rate that a lender charges will depend on the borrower’s credit rating and the length of the loan, but rates are typically lower than for other forms of debt. Loan lengths can vary from a few months to a few years.
No Collateral Required
Personal loans are typically unsecured, which means no collateral is required. If you don’t qualify only for an unsecured loan, you may select a loan cosigner with a stronger credit rating to help you get approved.
Recommended: Guarantor vs Cosigner
Fixed Monthly Payments
Most personal loans have fixed monthly payments based on the amount borrowed, the interest rate, and the term. This makes budgeting easier because the borrower knows how much they must pay each month.
Recommended: Try Our Personal Loan Calculator
Cons of a $15,000 Personal Loan
One disadvantage of a $15,000 personal loan is that it can be expensive, especially if you have bad credit or need to spread the payments out over many years. The longer the term, the more you will pay in interest. Here are some other issues to consider:
Taking on Debt
If you already have trouble paying your monthly bills, taking on more debt may not be a good idea. Some borrowers use a personal loan to consolidate other debt that charges higher interest, such as credit cards. For people who have a tendency to overspend, freeing up their credit may just encourage them to spend more again.
Higher Payments Than Credit Cards
Credit cards do not have a deadline to pay off the entire debt. For that reason, the monthly minimum payment is typically less than the payment on a personal loan. If a personal loan is used to consolidate credit card debt, some borrowers may find it difficult to make the higher payments of a personal loan.
Origination Fees and Prepayment Penalties
Some lenders will charge an origination fee to cover the cost of setting up the loan. Additionally, if the borrower wants to pay off the loan before the payoff date, the lender may charge a penalty. Borrowers should find out about any fees and penalties before deciding on a lender.
Interest Rates May Be Higher Than Other Options
For borrowers with poor credit, the interest rate on a personal loan can be high. In this case, a credit card might be a better option.
Where Can I Get a $15,000 Personal Loan?
Online lenders, traditional banks, and credit unions all provide $15,000 personal loans. Some online lenders pre-qualify borrowers so they can see the terms, and many will deposit funds into a bank account within one to two days.
Traditional banks or credit unions may offer better terms to their members because there is a pre-existing relationship. But they may also want to meet with a borrower in person to negotiate the loan.
How to Get a $15,000 Personal Loan
The steps to get approved for a personal loan are typically the same regardless of the lender. The first step, before you even apply, is to review your credit history. You can pull a report for free from each of the three major credit bureaus — Equifax, Experian, and TransUnion — from the website AnnualCreditReport.com. Then you can file a dispute online to have any inaccuracies removed. This can boost your credit rating and ensure you get the best terms from a lender.
Here are the basic application steps you’ll need to be prepared for:
1. Check Your Eligibility
Shop around for the best loan terms and find out if you qualify. Check both online lenders and traditional lenders, paying special attention to origination fees and prepayment penalties.
2. Get Pre-qualified
Getting pre-qualified will show you what terms the lender is offering based on your credit history. Fill out the online form, including how much you want to borrow and your desired payoff time frame.
Lenders will pull your credit report to pre-qualify you, which may ding your credit score. Focus on lenders who will perform a “soft inquiry” for pre-qualification, which will not affect your credit rating.
Recommended: What’s the Difference Between a Hard and Soft Credit Check?
3. Check the Terms
Once you are pre-qualified, review the pre-approval letter and check the loan amount. Check whether it is an unsecured or secured loan, the annual percentage rate (APR), and whether the interest rate is fixed or variable. Pay attention to the monthly payment and the payback term. Also look for fees, penalties, and other potential charges.
4. Apply for the Loan
Gather the documents that you will need to apply for the loan. Borrowers typically need to upload a pay stub, mortgage or rent agreement, debt documentation, proof of identity, and their social security number.
Applying for Other Small Loan Amounts
Loan amounts can range from $1,000 up to 100,000. The terms for a small $3,000 personal loan will vary with those for a larger loan. Here are some examples of loan interest rates, terms, and monthly payments.
$5,000 Personal Loans
Here’s a typical scenario for a borrower with average credit (700–759 credit score): The monthly payments on a $5,000 personal loan, paid back over five years at an APR of 15.75% to 18.25%, would be around $121–$128.
$10,000 Personal Loans
For a $10,000 personal loan paid back over five years at an APR of 12.75% to 15.25%, a borrower with average credit would pay $226 to $239 per month.
$20,000 Personal Loans
For a $20,000 loan paid back over five years at an APR of 12.75% to 15.25%, a borrower with average credit would pay $452 to $478 per month.
The Takeaway
Personal loan interest rates are determined by a borrower’s credit rating and financial history. The higher the credit rating, the lower the interest rate. For consumers with good credit, a $15,000 personal loan can be a more affordable form of debt than credit cards. For consumers with bad credit, the higher interest rate may make a $15,000 personal loan less attractive.
SoFi offers competitive personal loans. There are no origination, prepayment, or late fees as there are with some other lenders, and our competitive interest rates are fixed, making budgeting easier.
FAQ
What credit score is needed for a personal loan for $15,000?
A credit score of at least 660 is typically required for a $15,000 personal loan. Some lenders that cater to people with poor credit will charge higher interest rates and fees to cover their elevated risk.
How long can I get a $15,000 personal loan for?
Personal loans are typically for three, five, or seven years. The shorter the repayment period, the less interest you will pay over the life of the loan.
What would payments be on a $15,000 personal loan?
The monthly payments on a $15,000 loan depend on the interest rate and repayment terms. If you know how much you want to borrow, over what period, and at what interest rate, an online loan calculator can tell you what your payments will be.
Photo credit: iStock/fizkes
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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 circ*mstances.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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