• Preston Morris

How much can you borrow on an unsecured personal loan?


You borrow an unsecured loan in a lump sum, which can be between $1,000 and $400,000, and repay it, plus interest, in monthly installments. Interest rates on unsecured personal loans range from about 6% to 36%.


Who should consider a large personal loan?

Personal loans can be used for almost anything, so they are a great resource for large, justifiable expenses. But borrowing the maximum loan amount shouldn’t be considered for non-essential expenses.


Your own circumstances and financial situation will dictate when you should or shouldn’t consider a large personal loan, but here are a few conditions that may indicate whether it makes sense.


You may consider a large personal loan if you:

Have a good-to-excellent credit score.

Have a low debt-to-income ratio.

Have an emergency expense.

Want to consolidate other high-interest debts into one payment.

Need to fund a major event like a wedding or a funeral.

Need to make home improvements that will increase the resale value of your home.


You should not consider a large personal loan if you:

You have poor credit.

You have a high debt-to-income ratio.

Want to fund a vacation.

Want a non-essential big-ticket item.

Cannot afford the monthly payment under your current budget.

Taking out a five-figure loan is a big deal; it should be a necessary option or something that minimizes your debt (consolidation) or increases an investment (home repairs).


Be mindful that taking on more debt can cause your credit score to drop and make it more difficult to qualify for other financial products in the future. If you decide you only need to borrow a little bit, you can check out our guide on small personal loans.


How to get a personal loan

If you’re ready to take out a personal loan, follow these four steps:

  • Research and compare lenders. Be sure to shop around and compare as many personal loan lenders as possible to find the right loan for you. Consider not only interest rates but also repayment terms, any fees charged by the lender, and eligibilty requirements.

  • Pick a loan option. After comparing lenders, choose the personal loan option that best suits your needs.

  • Complete the application. Once you’ve picked a lender, you’ll need to fill out a full application and submit any required documentation, such as tax returns or pay stubs.

  • Get your funds. If you’re approved, the lender will have you sign for the loan so the funds can be released to you. The time to fund for a personal loan is usually about one week — though some lenders will fund loans as soon as the same or next business day after approval.

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