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  • Writer's picturePreston Morris

Get a $40,000 Personal Loan: Options for Unsecured Loans

Updated: Jun 24, 2021

Banks and credit unions can be another option for getting a $40,000 personal loan. Some banks and credit unions also offer online loan applications — though in some cases, you might need to apply in person at a local branch.

Whether you have good credit or bad credit, you may qualify for a $40,000 personal loan. Personal loans can help finance purchases, home improvement projects, or consolidate debt. However, most lenders allow you to spend your personal loan on just about anything.

Different Types of Collateral

  • Automobiles

  • Machinery and equipment

  • Insurance policies

  • Cash accounts

  • Real estate

Of course, various lenders have differing opinions on what to accept as collateral. There are some lenders who will not accept retirement assets to serve as collaterals against $40,000 loans. The loan amount will also determine what is acceptable.

After getting approved, have a definite plan on how to make timely payments. Secured loans offer a lower interest rate. Use our comparison tool above to see how to get approved for a $40,000 loan.

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How much will you pay monthly for a $40,000 personal loan?

How much you’ll pay for a $40,000 personal loan mostly depends on your credit and the repayment term you choose, as both of these will factor into the interest rate you’ll get. Generally, the higher your credit score, the lower the interest rate you might qualify for — which means you’ll pay less in interest over the life of your loan.

For example, here’s how credit scores affected average personal loan interest rates offered to borrowers applying for three-year personal loans through the Curbie & Bessie Capital Investments in February 2021:

  • 720 to 780: Borrowers with credit scores in this range were offered an average 12.47% APR. If you took out a $40,000 loan at that rate with a three-year term, you’d pay $8,153 in interest over the life of the loan.

  • 640 to 680: Borrowers with scores in this range received an average APR of 24.61% APR. On a $40,000 personal loan with a three-year term, these borrowers would pay $16,958 in total interest charges.

  • 600 to 639: Borrowers with these credit scores were offered 29.59% APR. On a $40,000 personal loan with a three-year term, they would pay $20,807 in total interest charges.

As you can see, your credit score can make a huge difference in how much a personal loan will cost you overall. If you decide to take out a personal loan, it’s a good idea to consider how much that loan will cost you — this way, you can prepare for any added expenses. You can use Curbie & Bessie Capital Investments personal loan calculator to see how different interest rates and loan terms will affect your monthly payment and overall cost.

What are the requirements for a personal loan?

Requirements to qualify for a personal loan will vary between lenders. However, there are some common eligibility criteria that you’ll likely come across, including:

  • Good credit: To qualify for a personal loan as large as $40,000, you’ll typically need good to excellent credit.( At least 680 )

  • Verifiable income: Lenders want to see that you can afford to repay the loan, which means you’ll need to provide information about your income as well as documentation to verify it. For example, you might need to submit pay stubs or tax documents.( A minimum annual income of $30K )

  • Low debt-to-income ratio: Your debt-to-income (DTI) ratio is a percentage that shows how much of your monthly income goes toward debt payments. Lenders will check your DTI ratio to make sure you have enough income to cover the new loan payments on top of your other commitments — in general, lenders like to see that your DTI ratio is below 40%. You can calculate your debt-to-income ratio by dividing your total monthly debt payments by your monthly income.

Keep in mind that lenders might also have other requirements to qualify for a personal loan. Be sure to double-check with the lender before you apply, so there aren’t any surprises.

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