How to get a $50,000 personal loan

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A $50,000 loan can be used for anything from financing a major purchase to funding a home renovation. Here’s how to get one. (iStock)

Whether you’re financing a major purchase or trying to fund a home remodel, obtaining a $50,000 loan will go a long way toward bringing your dream within reach.

You’ll likely need good to excellent credit to qualify for such a large loan amount. Comparing rates and lenders is essential when looking for a larger loan to ensure you save the most money on your loan and get the best terms.

Credible makes it easy to compare rates from personal loan lenders who offer $50,000 loans.

Where to get a personal loan for $50,000

Choosing a lender is one of the most important parts of the lending process because your lender will determine how much you pay each month and over the life of your loan. You have many lender options, but each lender has its own rates, terms and fees.

Two different types of lenders offer $50,000 loans:

Banks and credit unions — If you have an account with a local credit union or bank, you might be able to qualify for special discounts or other offers on a personal loan.
Online lenders — Online lenders offer quick funding and often have lower rates because they don’t have to pay to maintain physical facilities.

Taking a little extra time to compare rates from three to five different lenders could save you hundreds to thousands of dollars over the life of your loan.

These Credible partner lenders offer personal loans for $50,000 or more.

Best Egg

Best Egg is an option for borrowers with good credit scores. The lender offers an array of personal loans, with funding times as soon as one to three business days after successful verification.

Loan amounts: $2,000 to $50,000
Minimum credit score: 600

FreedomPlus

FreedomPlus is an excellent option if you want to consolidate credit card debt and need quick access to money. You’ll have to pay a loan origination fee, but there are no prepayment penalties.

Loan amounts: $7,500 to $50,000
Minimum credit score: Does not disclose

LightStream

LightStream is a good option for borrowers who need a large amount of money.

Loan amounts: $5,000 to $100,000
Minimum credit score: 660

PenFed

You’ll need a healthy credit score to qualify for a personal loan with PenFed, but if you’re approved, can have your funds in as little as two to four business days.

Loan amounts: $600 to $50,000
Minimum credit score: 670

SoFi

If you have an excellent credit score and you want help consolidating debt or funding a home improvement project, SoFi could be a good fit.

Loan amounts: $5,000 to $100,000

Minimum credit score: Does not disclose

Universal Credit

Universal Credit is an excellent option if your credit score isn’t great — the lender helps borrowers build their credit.

Loan amounts: $1,000 to $50,000
Minimum credit score: 560

Upgrade

Upgrade offers loans to borrowers with less-than-perfect credit. The lender makes credit decisions quickly, and you could have your funds within one day of approval.

Loan amounts: $1,000 to $50,000
Minimum credit score: 560

Upstart

Upstart uses a unique formula to qualify borrowers. In addition to your credit history, the lender reviews your education and job history.

Loan amounts: $1,000 to $50,000
Minimum credit score: 580

How much will a $50,000 loan cost with interest?

The actual cost of a $50,000 personal loan depends on factors such as your interest rate, repayment terms and fees. These factors vary by lender, as well as what you qualify for. You can use a personal loan calculator to get an idea of what you can expect to pay.

Here are two examples of what you might pay for a $50,000 loan with different terms:

Three-year repayment term

Interest rate: 10%
Monthly payment: $1,613
Total payment: $58,080

Five-year repayment term

Interest rate: 17%
Monthly payment: $1,243
Total payment: $74,557

How can I qualify for a $50,000 loan?

Specific qualifications for a $50,000 personal loan vary by lender. But there are a few things you can expect your lender to consider:

Debt-to-income ratio

Your debt-to-income ratio (DTI) shows how much of your income is already taken up by debt payments, such as your rent or mortgage. Most lenders look for a DTI at or below 36%. While some lenders will approve loans with a higher DTI, there’s more risk for them, so you may be charged a higher interest rate.

You can determine your DTI by adding up all your monthly debt payments (including rent and loan payments) and dividing that amount by your gross monthly income (what you make before taxes). Multiply that number by 100 to get your DTI.

Say you have a total of $1,000 in debt payments (including a credit card, student loan payment and a car loan), and your monthly gross income (before taxes) is $3,500 — your total DTI would be 29%.

Credit score

Your credit score directly affects your interest rate. If you have a higher credit score, you’ll qualify for lower rates. Your credit score takes all your credit history (credit age, repayment history, amount of debt and type of debt) and boils it down to a three-digit number. This number tells lenders whether or not you’re a risky customer. The lower your credit score, the more likely you are to default on a loan, from a lender’s perspective.

Annual income

Your annual income also determines how much you qualify to borrow. Lenders typically look at your pre-tax income.

Applying for a $50,000 personal loan

When you’re ready to apply for a $50,000 loan, follow these steps:

Shop around. It’s important to compare rates from at least three different lenders to find your best option.
Submit your application and required documentation. Make sure to keep these documents on hand in case the lender has questions.
Complete a quick interview. Some lenders require a phone interview; others will determine your eligibility and approve your loan without a phone call.
Receive your funds. Once the lender approves your loan and you sign the appropriate documents to accept the loan, you can expect to receive your funds within a few days.

Before signing on the dotted line, have a repayment plan in place. Consider setting up automatic payments, as some lenders offer a discount if you agree to have your payment taken out of your account automatically each month.

Credible lets you compare personal loan rates from various lenders in one place.

Getting a $50,000 loan with fair or bad credit

Having fair or bad credit doesn’t automatically mean you won’t qualify for a personal loan. Some lenders cater to borrowers with low credit scores. While you can expect to pay higher interest rates for these loans, you may still be able to access the cash you need.

You have a couple of options when it comes to taking out a personal loan with bad credit. You can apply on your own if you’re confident that you’ll receive the loan and you’re comfortable paying a higher interest rate.

You can also ask a trusted friend or family member with an excellent credit history to cosign the loan with you. When you have a cosigner, the lender looks at their credit history to help determine your interest rate.

A cosigner with great credit can substantially increase the amount you qualify for and reduce the interest rate on your loan. Remember that while your cosigner doesn’t benefit from cosigning your loan, they take on a lot of risk — they’ll have to repay the loan if you fail to — so think carefully before asking someone to be your cosigner.

What to know about personal loans

Personal loans allow you to fund various purchases, from a dream vacation to medical expenses or home repairs. Many personal loans don’t require collateral, though a secured loan (one that does require collateral) could be an option if you have a very low credit score.

Consider the following factors when shopping around for your $50,000 personal loan:

Interest rates

Your interest rate determines how much your loan will cost overall. A lower interest rate means a lower total loan cost.

Monthly payment

Your monthly payment is determined by your interest rate, loan amount and repayment terms. Longer repayment terms mean a lower monthly payment, but you’ll likely pay more in interest. Shorter repayment terms will result in a higher monthly payment, but you can pay the loan off faster and save money on interest. When shopping for a loan, make sure the monthly payment will work within your budget.

Fees

Ask your lender what type of fees it charges. Standard fees include loan origination fees for processing the loan, late fees and prepayment penalties. These fees can affect the amount of money you receive, or add to your total loan balance.

Repayment terms

Most personal loans have repayment terms between one and five years, though some lenders offer terms of up to seven years. The repayment term will affect your monthly payment and the total cost of your loan.

Total principal

The total principal is the amount you borrow plus any fees. Some lenders reduce your loan by the fee total, while others add the fee on top of the amount you borrow. Ask your lender how its fees will affect your loan.

Total interest

Total interest refers to the total amount of money you pay to borrow funds over the life of your loan. You can use a personal loan calculator to play around with different interest rates and repayment terms and get an idea of how much you’ll pay in interest overall.

If you’re ready to get a $50,000 personal loan, check out Credible to compare rates from different lenders.

Alternatives to a personal loan

If a personal loan isn’t right for you, you may want to consider the following options:

Home equity loan — A home equity loan allows you to tap into equity on your property for a lump-sum payment. Ideally, you should have at least 20% equity in your home to apply. A home equity loan is a convenient option because you may be able to wrap the loan payments back into your mortgage payment. But you risk losing your home if you can’t keep up with the payments.
Cash-out refinance — A cash-out refinance lets you take advantage of potentially lower interest rates and get additional cash simultaneously. With a cash-out refinance, you can take up to 85% of the equity in your home as a cash payout. These types of loans often have lower interest rates, and you may be able to use the interest rate as a tax deduction if the money is used to make significant improvements to your home. Again, you risk losing your house if you can’t make your payments.

Personal Finance