Need $30,000? Here's how a personal loan could make it happen

Sometimes you need a significant amount of money for a dream project, like remodeling a kitchen or basement. Or you might need the additional funds to pay off an unexpected medical bill. Whatever the reason, a personal loan may be the answer. Stick with us as we walk you through everything you need to know about how personal loans work—so you can decide if applying for a loan is right for you. 

What you need to know about a $30,000 personal loan

First off, $30,000 is an amount of money that could help accomplish a number of things. Whether you want the money to enhance your life or consolidate existing bills, a personal loan could be a sensible way to access the funds. 

The first thing to know about personal loans is that they're nearly always unsecured. An unsecured loan simply means you don't have to provide collateral. With a secured loan, collateral is required. When you take out a mortgage loan on a home, for example, the home itself acts as security. If you stop making mortgage payments, the lender knows it could repossess your home, sell it, and recoup its losses. The same is not true of an unsecured personal loan. 

If you borrow $30,000, you could expect to pay between 1.99% and 6.99% in origination fees, depending mainly on your credit rating and the fee range for the lender. The origination fee comes directly from the loan proceeds, which means you'll receive between $597 and $2,097 less than the $30,000 you applied for. You'll want to factor that amount in as you determine how you’ll spend the loan.  

You can expect to receive the money in one payment. You'll begin making monthly installment payments approximately one month after receiving the funds. With a fixed-rate loan, planning for those payments is much easier than with a variable-rate loan. In other words, the payment you're quoted before signing the loan is the amount you'll pay each month until it's paid off. 

Customizable features

During the application process, you have two important decisions:

1. Take advantage of potential discounts. For example, Achieve Personal Loans offers three types of rate discounts. The first is a co-borrower discount, which requires adding a qualified co-borrower to your loan application. Next is a retirement asset discount. This discount requires proof of sufficient retirement funds such as in a 401(k), IRA, Roth IRA, or Thrift Savings Plan (TSP). If the purpose of your loan is to consolidate high-interest debt into a single loan, you could snag a discount by enrolling in direct pay. This allows the lender to use loan proceeds to pay your creditors directly. 

2. Choose your loan term. With an Achieve personal loan, you choose a loan term of 2, 3, 4, or 5 years. Selecting the term that's right for you is a big decision. While a longer-term loan lowers your monthly payment, you’ll pay more in interest over the life of the loan. 

Example

Imagine you'd love to update your kitchen to make it into the kitchen of your dreams. You want to replace everything—from the stovetop to the dishwasher. You borrow $30,000 at a fixed rate of 12%.

You could opt for a longer-term loan and lower your payment, or reduce the total cost of the loan by choosing a shorter term. Here's what that could look like: 

These examples are for informational purposes only. Interest rates and payments are for illustrative purposes only. Individual results vary.

Best uses for a $30,000 personal loan

You probably already have an idea of how you'd spend $30,000, but if you’d like to know how other people use a personal loan, here are some examples:

• Consolidate high-interest debt

• Make home improvements

• Cover the cost of a wedding 

• Purchase a vehicle

Is a personal loan right for you? 

There's a personal loan for nearly everyone, whether their credit score is excellent or poor. The primary difference is the interest rate of the loan. Lenders worry that an applicant with a poor credit score may have a tougher time repaying the loan. To hedge against the risk, they charge a higher interest rate and, often, higher loan fees. They're not trying to discourage anyone from applying, but they want to protect their interest if the borrower runs into trouble.

That said, it's important to know hardship loans are available for those unavoidable times when money gets especially tight. Here are some examples of when a hardship loan may come in handy:

• Funeral expenses

• Unexpected medical costs

• Home damage not covered by insurance

• Emergency car repair

• Sudden job loss

• Avoiding eviction or foreclosure

It could help to ask these questions before you apply for a personal loan:

• How's my credit score? Is it high enough to help me land a personal loan with a lower origination fee and interest rate? Would I benefit by working to improve my credit score before I apply for a personal loan? 

• Is there room in my budget for the monthly payment? Run the numbers to see if that extra payment will fit comfortably with your regular expenses. 

• Do I have enough money to cover an emergency so I never miss a loan payment? 

How to qualify for a $30,000 personal loan

One of the best ways to prepare for a personal loan is to request a free copy of your credit report from the major credit reporting bureaus. It's easy to do through a site like AnnualCreditReport.com. Once you receive the reports, review each to make sure there aren’t any mistakes. If you find any error (no matter how small), dispute it with the credit bureau. Credit bureaus have 30 days to investigate the error and remove anything they can't verify. These four factors also impact loan approval:

• Credit score: Every lender sets its own minimum required credit score..

• Income: Lenders usually verify that you have income, and that it’s enough to cover your debt payments, including the new loan you want. 

• Collateral: Achieve doesn’t require collateral for a personal loan, but some lenders do. 

Steps to apply for a $30,000 personal loan 

The application process is relatively straightforward. Before you start, you may want to take a look at your monthly budget to ensure you'll be comfortable making the monthly loan payment. Once you're convinced there's room in your budget, applying for a personal loan typically requires these simple steps: 

• Shop lenders. The goal is to find a lender with a low interest rate, low fees, and terms you like. 

• Complete an online application. You'll be asked for your desired loan amount, state of residence, and contact information. 

• Wait for the lender. The lender will inform you soon after receiving your online application if you're prequalified. Prequalified means the lender believes you will qualify but won't know for sure until they've dug a little deeper. 

• Make a decision. Once you're prequalified, decide if you want to move forward with your application. 

• Complete the application process. If you're comfortable with the rate and fees the lender quoted and want to continue with the loan, you may be asked to provide the following:

  • Proof of income

  • Social Security number

  • Proof of identity

  • Employment status

What to expect after a $30,000 personal loan is approved

You're not committed to accepting a loan until you've signed loan documents. Before you do, take one last chance to decide if you're ready for this financial commitment. And then it's time to:

• Wait for funding. Every lender has their own timeframe for funding a personal loan. Funding could take one business day to a couple of weeks. 

• Plan for the monthly payment. The first monthly payment is typically due the month after receiving funding. 

• Keep early payoff in mind. While some lenders charge an early payment penalty, Achieve does not. Remember you could always pay the loan off early if your situation allows. 

What's next

Next, you have the opportunity to make the most of the funds you've borrowed. As a bonus, with each on-time payment you make, your credit rating improves. It's a win-win.