A personal loan calculator can help you get an idea of monthly payments and total interest costs for your $100k loan.
Before you apply for a personal loan from a bank, credit union or online lender, make sure you do your homework. Research the personal loan rates currently available and what makes the most sense for you.
- Check your credit score. For a personal loan this size, you’ll likely need to have a credit score of at least 720. A score of 750 or higher is considered excellent credit (you can work on improving your credit by following these simple steps). If you already know your credit score, then you can find personalized rates today through Credible.
- Learn lender requirements. Financial institutions may have different criteria for approval, and it’s good to know what they are before you start the application process. You may also need to provide the loan purpose, which helps the lender assess the risk.
- Gather the necessary paperwork. You’ll need these three documents:
- A government-issued identification
- Proof of income
- Bank statements
Getting a $100,000 loan with fair or bad credit
There’s no sugar-coating it – if you have bad credit, or even just fair credit, it could be very difficult to qualify for a $100,000 loan.
But you may be able to find a smaller loan that could help meet your needs, even with a thin credit history, since some lenders offer loans specifically for people with bad credit. These loans typically come with a higher interest rate than loans for borrowers with good credit. If you can’t afford the payments with the higher rate, you have options.
First, consider getting a cosigner, such as a family member or close https://paydayloanstennessee.com/cities/east-ridge/ friend, who has good or excellent credit. Lenders are more likely to approve the loan because cosigners agree to assume the responsibility for the debt if you can’t repay it for any reason. But use caution with this type of arrangement. If there’s a chance you may be unable to cover the monthly payment, you risk damaging your relationship with the cosigner by defaulting. And if they’re unable to pay the loan, their credit could suffer, too.
Your second option is to take steps to build up your credit profile before applying for a loan. If the reason you need the personal loan isn’t urgent, make sure to pay your bills on time. You can also pay down loan balances to lower your credit utilization ratio. Take on a second job to increase your income and build your debt-to-income ratio. And avoid closing an old account as it can help your length of credit.
Adding a cosigner or improving your credit score can save you money in the long run by helping you qualify for a lower interest rate.
What to know about personal loans
Personal loans are unsecured loans, which means you usually don’t have to offer collateral to be approved for one. Depending on the lender, personal loans can be used for virtually anything, such as debt consolidation, home improvements, weddings, vacations and more. Interest rates can be fixed or variable.
- Interest rate – This is the amount lenders charge to borrow money.
- APR – Annual percentage rate includes your interest rate and other costs associated with your loan. Because it incorporates all your loan-related expenses, like fees, APR is a better indicator of the true, total cost of a loan.
- Monthly payment – This is the amount of principal and interest a borrower will pay each month to the lender. It’s based on the loan amount, loan term and interest rate.