Did you know that you could use a personal loan for just about anything? You can use the money to pay off debt, make a large purchase, or cover an emergency expense. But how much can you actually get from a personal loan? And what are the best ways to use one? Keep reading to learn more.
Personal Loan Amounts: What Is A Common Range?
When you’re considering taking out a personal loan, it’s important to have an idea of the amount of money you’ll need. Most lenders offer personal loans in the range of $1,000 to $50,000, although the amount you’re approved for will depend on your financial situation.
What factors determine your ability to get a personal loan?
Your financial situation can affect the amount of your loan. Factors such as:
Your Credit Score
A good credit score is important if you ever need a loan. Lenders look at your credit score to determine how likely you are to repay the debt. A high credit score means you’re a low-risk borrower, which could lead to a lower interest rate on your loan. A personal loan generally requires a credit score of 650 or higher.
If your credit score is lower than that, there are things you can do to improve it. For example, you can make sure you pay all your bills on time, every time. You can also keep your credit card balances low and only apply for new credit when needed. Improving your credit score takes time and effort, but it’s ultimately worth it.
Your DTI is an important factor in determining whether or not you can qualify for a loan. Lenders will use your DTI to determine how much you can afford to borrow. The higher your DTI, the more likely it is that you will have difficulty making your monthly payments.
Therefore, it is important to keep your DTI as low as possible. One way to do this is to pay off any outstanding debts. This will free up more of your income for loan repayments. By keeping your DTI low, you can increase your chances of qualifying for a loan.
Have A Co-signer
A cosigner is someone who agrees to repay a loan if the borrower defaults. This person must have good-to-excellent credit and income in order to qualify. Having a cosigner can help you get a higher loan amount from a lender, as it shows that the loan is more likely to be repaid.
However, being a cosigner is a big responsibility, and you could risk your own finances if the borrower falls behind on their payments. Before cosigning a loan, make sure you understand all the risks involved.
Related Articles: Getting A Personal Loan With A Co-signer
The Bottom Line
When you’re looking to borrow money, whether it’s for a car, home improvement project or another expense, it’s important to know how much you can afford to take out. Your income, credit score and other factors will all play a role in determining the size of the loan you’re eligible for.
The best way to know how much you can borrow is to get pre-qualified with a lender through My USA Finance.
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