How to get a $10,000 personal loan

What's on your financial to-do list? 

Maybe it's time to replace your outdated appliances. Or perhaps you want to tackle a small but much-needed home repair. Whatever your goal, a $10,000 personal loan could help you get there. 

Let's look at how a $10k personal loan works and how you might qualify for one. 

What you need to know about a $10,000 personal loan

A personal loan lets you borrow a lump sum of money for personal reasons. You pay it back over time, with interest. 

Here's a quick look at the typical features of personal loans:

• Fixed rates. Personal loans have fixed interest rates, meaning the rate doesn't change over the life of the loan. 

• Predictable payments. A fixed-rate personal loan has a set monthly payment that stays the same from beginning to end. 

• No collateral. Some loans require collateral or something of value that you own to secure them. Personal loans are most often unsecured, so you don't need collateral. 

How much does a personal loan cost? Your monthly payments and total cost depend on the amount you borrow, the repayment term, and the annual percentage rate (APR). The APR is the annual cost of having the loan, including interest and fees. 

Here's an example. Say you get a $10,000 personal loan at 19% with a two-year repayment term. You'd pay:

• $504 monthly 

• $2,098 in interest

This example is for informational purposes only. Interest rate and payments are for illustrative purposes only. Individual results vary. 

It's easy to calculate the cost of a personal loan with an online loan calculator. You can plug in different loan terms or rates to see how payments change. 

Best uses for a $10,000 personal loan

Personal loans let you move forward on your goals, whatever they might be. Flexibility is one of the best features of personal loans, since you can use them to cover a range of expenses. 

Is a $10,000 personal loan right for you? It could be if you need money to:

• Complete a mini home makeover or repair

• Consolidate debt

• Fund a major purchase

• Pay for important life events, like a wedding or a first car for your teenager

• Cover an unexpected financial emergency

• Pay medical bills for yourself or vet bills for a pet

• Buy supplies or equipment to start a micro business

There’s not much you can't do with a personal loan. If a lender restricts what you can use a loan for, they should let you know up front. 

For example, some lenders don't allow you to use a personal loan to pay for college. But that makes sense, since federal student loans are typically the cheapest and best option if you need to borrow for education. 

How to qualify for a $10,000 personal loan

Lenders decide who qualifies for a personal loan, but it all comes down to the strength of your financial profile. Lenders consider three main things for personal loans:

1. Credit scores. Lenders look at credit scores and reports to check your history of on-time payments and how much debt you already have.

2. Income. You'll need to show a lender that you have the ability to make the loan payments. 

3. Debt-to-income (DTI) ratio. This ratio tells lenders how much of your income goes to debt repayment. The lower this number is, the better. You can use a debt-to-income ratio calculator to do the math. 

Good credit scores, solid income, and minimal debt could all work in your favor for approval. If you're concerned that your score isn't high enough, there are a few ways to improve it. Below are some examples:

• Pay down some of your existing debt, if you have any

• Pay your bills on time

• Leave older accounts open

• Consider a credit limit increase on your credit cards

A credit limit increase could help your credit utilization ratio. This ratio measures how much of your credit limit you use at any given time. High limits and low balances is the best combination to grow your credit scores. 

Steps to apply for a $10,000 personal loan

It's easy to apply for a personal loan online. The sooner you start the process, the sooner those funds could be in your bank account so you could use them toward your goals. 

Here's what the personal loan application process typically looks like.

• Check your credit. It's helpful to check your credit before you apply for a personal loan to get an idea of what lenders will see. 

• Get a rate quote. Rate quotes tell you what you might pay for a personal loan, based on your credit score. You can compare rates from different lenders to see who has the best terms. 

• Apply. Once you choose a lender, you can apply for a personal loan. You might need to tell the lender what you plan to use the loan for and your preferred repayment term. 

• Upload documents. Your lender might ask for documentation to go with your loan application. The kinds of documents you may need include pay stubs, tax forms, and bank account statements. 

It shouldn't take more than 10 minutes to apply for a personal loan online. At the very least, it's worth a few minutes of your time to check rates and see what you might pay. 

What to expect after a $10,000 personal loan is approved

You're approved for a $10k personal loan—congrats! Now you can complete the next steps. 

You'll need to review the loan agreement and sign it. Once you do that, the lender will release the loan funds to you. 

Funding for online personal loans is usually pretty quick. It's not unusual to find lenders that deposit loan proceeds to your bank account in one to two business days. 

As far as repayment goes, your lender will give you a schedule that shows:

• When monthly payments are due

• The amount you'll pay

• How much of your payment goes to interest and principal, which is what you borrowed

What if you want to pay a personal loan off early?

You could do that, as long as your loan agreement doesn't prohibit it. If your lender charges a prepayment penalty, that should be spelled out in the agreement. A prepayment penalty is a fee lenders use to recover some of the interest they miss out on when you pay off a loan early. 

The most important thing is to pay on time each month, since paying late could trigger a fee or hurt your credit. 

If your lender offers an interest rate discount for automatic payments, it might be worth it to enroll. That way, you know the payment gets there on time and you reduce your total loan costs.

As an added plus, your timely payments could help you build your credit score, which could make it easier to qualify for loans in the future. 

What's next

• Check your credit reports and scores to see what lenders will see if you apply for a loan. 

• Get a rate quote for a $10,000 personal loan to estimate your interest rate and monthly payment. 

• Review your budget to see where the monthly payment for a $10,000 personal loan might fit.