How To Get a $20,000 Personal Loan (March 2024 Guide) (2024)

We at the MarketWatch Guides team rounded up our top choices for $20,000 personal loans based on interest rates, funding times, term flexibility and more. Compare the following loans to find the right one for you.

• LightStream: Our top pick
• SoFi: Best customer service
• PenFed: Best for small loans
• Discover: Best for low rates
• Upstart: Best for bad credit
• U.S. Bank: Best for bank switchers
• Upgrade: Best discounts
• Wells Fargo: Best for in-person service

LightStream offers loans of up to $100,000 at competitive rates. LightStream even promises to beat your lowest qualifying rate with its Rate Beat Program. You must have good credit to qualify, but if you do, you can receive your funds within a day.

Pros and Cons of LightStream

Pros

• No fees or prepayment penalties
• Borrow up to $100,000
• Rate Beat Program offers to beat competing unsecured lenders’ rates by 0.10 percentage points
• A+ Better Business Bureau rating
• Can get an autopay discount

Cons

• Borrowers typically have at least several years of credit history.
• Must have good to excellent credit to qualify
• No option for preapproval

LightStream Eligibility Requirements

You must have good to excellent credit to qualify for a LightStream loan, though a high credit score doesn’t guarantee approval. LightStream notes that their borrowers tend to have several years of credit history, a stable income, liquid assets and a good payment history.

SoFi stands out for its customer service, with an A+ score from the Better Business Bureau and a rating of 4.7 out of 5 stars on Trustpilot. Another significant benefit is their unemployment protection feature, which modifies your monthly payments in the case of a job loss and even helps you find new employment. In addition to highly rated customer service, SoFi offers quick prequalification, flexible loan terms and rate discounts.

Pros and Cons of SoFi

Pros

• Modified payments in case of unemployment
• Prequalify online in minutes
• Flexible repayment terms from two to seven years
• No origination, prepayment or late fees
• Autopay and direct deposit discounts

Cons

• No option to apply with a co-signer
• $5,000 minimum loan amount
• Restrictions on changing your loan payment due dates

SoFi Eligibility Requirements

SoFi doesn’t disclose complete requirements for getting a personal loan, but they do state you need to be employed, have an employment offer to start within 90 days or have sufficient income from another source in order to be eligible. They also state that loan eligibility and interest rates depend on your financial history, credit score and monthly income versus expenses.

PenFed, the country’s second-largest credit union, offers personal loans of up to $50,000 at competitive rates. Though you don’t need to be a member to apply for a loan, you do need to apply for membership if you qualify and want to move forward with funding. Prequalification for PenFed personal loans is available, and you don’t have to worry about origination or early payment fees.

Pros and Cons of PenFed

Pros

• Prequalification available
• Don’t have to be a PenFed member to apply
• Competitive interest rates
• No origination or prepayment fees
• Co-borrowers allowed

Cons

• Late fees for payments more than five days late
• Must become a PenFed member to accept a loan
• Loan terms are capped at five years

PenFed Eligibility Requirements

PenFed doesn’t disclose all eligibility requirements, such as minimum credit score and debt-to-income (DTI) ratio, which measures your monthly income against existing loan payments. But you do have to apply for PenFed membership if you qualify for a loan and wish to move forward.

Popular for its credit card products, Discover also offers personal loans with attractive features. Discover loans have few fees, easy prequalification and flexible terms. However, loans are capped at $40,000, and Discover only accepts individual applications.

Pros and Cons of Discover

Pros

• Borrow as little as $2,500
• Loan terms range from three to seven years
• No fees as long as you make on-time payments
• Next-day funding
• Prequalification available

Cons

• Loans capped at $40,000
• No co-signers or co-borrowers permitted
• Late fees can be high

Discover Eligibility Requirements

Discover doesn’t disclose a minimum credit score or DTI ratio required to qualify for a loan. You don’t need to be employed, but you need a household income of at least $25,000 to be eligible for a loan.

Not only does Upstart advertise very low starting rates*, but this lender has a minimum credit score requirement of just 300 — meaning borrowers with bad or no credit may be able to qualify. While Upstart isn’t a no-fee lender, it does offer prequalification and next-day funding**. Plus, there are no prepayment penalties.

Pros and Cons of Upstart

Pros

• Borrow as little as $1,000***
• No prepayment penalties
• Prequalification available
• Next-day funding available
• You may be able to qualify with bad credit.

Cons

• Only three- and five-year terms are available.
• No co-signers
• You may have to pay an origination fee up to 12%.

Upstart Eligibility Requirements

Upstart has no credit score requirements, so you can even get a fair credit loan. When reviewing your application, this lender will consider your DTI ratio, education and employment along with your credit history.

If you’re not already a member, switching to U.S. Bank means getting some upgrades to your personal loan. For instance, members get more flexibility when it comes to payment terms and loan amounts, and they also have a lower minimum credit score requirement to meet. But both U.S. Bank members and non-members benefit from no prepayment or origination fees.

Pros and Cons of U.S. Bank

Pros

• No origination fees or prepayment penalties
• Flexible repayment terms
• Can borrow as little as $1,000
• Prequalification available
• Members can receive funds within hours.

Cons

• Non-members have more limitations on loan amounts and terms.
• Funding to non-U.S. Bank accounts can take up to four business days.
• Non-members have to meet a higher minimum credit score requirement.

U.S. Bank Eligibility Requirements

Existing U.S. Bank members need a credit score of 660 to qualify for a loan, while non-members need a score of 720. However, you need a credit score of at least 800 to get the lowest rates advertised.

With Upgrade, you can earn a cash bonus if you open a qualifying checking account and personal loan at the same time. Upgrade also offers fast funding and loan prequalification. With a Trustpilot rating of 4.5 out of 5 stars, many customers find this lender easy to work with.

Pros and Cons of Upgrade

Pros

• Fast funding — within one day
• No prepayment fees
• Earn a cash reward when you also open a checking account and meet the direct deposit minimum.
• Prequalification available
• Flexible repayment terms between 24 and 84 months

Cons

• Borrowers must pay an origination fee.
• You may have to pay late payment fees.
• Loans capped at $50,000

Upgrade Eligibility Requirements

Upgrade requires a minimum credit score of 620, and while your credit score is certainly considered, the rest of the information present in your credit profile is also reviewed during Upgrade’s approval process.

Wells Fargo may appeal to you if you’re uncomfortable with a digital loan application. While you can apply for a Wells Fargo personal loan online, you can also do so in person. However, you have to be a member to be eligible. On the plus side, you can borrow up to $100,000 with no prepayment penalties or origination fees.

Pros and Cons of Wells Fargo

Pros

• Loan amounts up to $100,000
• No prepayment penalties or origination fees
• Interest rate discounts for Wells Fargo checking account holders
• You can apply for a loan in person if desired.
• Prequalification available

Cons

• Funding can take up to three business days.
• You may have to pay late fees.
• You must be an existing Wells Fargo customer to be eligible for a personal loan.

Wells Fargo Eligibility Requirements

Wells Fargo doesn’t disclose full personal loan eligibility requirements, but it does limit eligibility to existing Wells Fargo customers. When you apply, the bank will consider your employment and income information in addition to your intended use for the loan.

Check out our review of Wells Fargo.

Getting a $20,000 loan requires filling out an application and providing your financial and personal information. You’ll also need to meet certain eligibility requirements if you want to borrow such a large amount of money.

Applying for a $20,000 Personal Loan

The application and approval process for a $20,000 loan may take as little as a day — especially when working with online lenders — or as long as a week. Here’s what the process looks like from start to finish:

• Research and compare lenders: Before applying for a loan, compare different lenders based on interest rates, term options, maximum loan amounts, funding times and more. Remember, choosing a loan with a slightly lower interest rate can save you thousands of dollars over the life of a loan.

• Prequalify: When a lender allows it, prequalifying for a loan can give you a better idea of the expected interest rate and terms you could qualify for — without hurting your credit score. Prequalifying doesn’t guarantee you’ll get the same offer when you formally apply, but it can help you compare various lenders more accurately.

• Submit an application: After choosing a loan — or loans — you want to apply for, fill out an application and submit the necessary information. Lenders usually require you to submit your personal and financial information, including ID, proof of employment and proof of income. They’ll also check your credit history.
• Sign the loan agreement and receive funding: If a lender approves your loan application, you’ll receive a loan agreement to review and sign. Depending on your lender’s funding time, you may have the money in your account within a day.

These days, many lenders allow you to complete the loan application process entirely online. Some even require it. If you’re not comfortable applying online, choose a lender that lets you apply in person or over the phone.

Requirements for a $20,000 Personal Loan

Getting a $20,000 personal loan isn’t as simple as signing a loan agreement. Before offering you a loan, a lender wants to see evidence of good credit history. This means they’ll want to see your credit score, income level and DTI ratio.

Requirements vary by lender, but most lenders require borrowers to have a credit score in the good to excellent range — meaning a score of at least 670. Some lenders state they require stable, consistent income, while others list a minimum income requirement. For example, Discover requires a household income of at least $25,000. Finally, personal loan lenders consider your DTI ratio or your ratio of debt to gross income. Lenders like to see a lower DTI — typically no higher than 35% and 40% — because it shows you have income available to put toward a new loan.

Loan approval, rates and terms vary by lender, but credit history, income and DTI ratio all impact your loan offer. A lower credit score, higher income and lower DTI ratio generally increase your chances of being approved for a loan with a lower interest rate.

Taking out a $20,000 personal loan is a major commitment that can last for years. And sometimes, it’s not the best way to finance a project or expense, especially if you have bad credit. Before taking out a personal loan, you may want to consider other financing options, such as home equity lines of credit, home equity loans and peer-to-peer lending.

Home Equity Line of Credit

A home equity line of credit (HELOC) allows you to borrow against the equity in your house. After qualifying for a HELOC, you can borrow up to your approved limit throughout the duration of your draw period. You have to start repaying the loan only once the repayment period kicks in.

Your home secures HELOCs, so they tend to have lower interest rates and are usually easier to qualify for with bad credit.

Pros and Cons of HELOCs

Pros

• HELOCs offer a revolving line of credit you can access as needed.
• The interest rates are generally lower than those of personal loans.
• Only borrow — and repay — what you need
• May be easier to qualify for than an unsecured loan

Cons

• You must have equity in your house to qualify.
• You risk losing your house if you miss payments.
• Rising interest rates could impact repayment

Home Equity Loans

Home equity loans are similar to HELOCs in allowing you to borrow against your home equity. But like a personal loan, home equity loans are a type of installment loan. Because home equity loans are disbursed in a single lump sum, they’re best for borrowers who know exactly how much they need to borrow and are prepared to repay the entire loan.

Pros and Cons of Home Equity Loans

Pros

• Home equity loans generally offer lower interest rates than personal loans.
• These loans typically have flexible terms.
• May be easier to qualify for than an unsecured loan
• Monthly installment loans can be easier to budget for.
• Home equity loans often have fixed interest rates.

Cons

• You must have equity in your house.
• You risk losing your house if you miss payments.
• You must repay the entire loan — plus interest.

If you think a home equity loan is right for you, check out our picks for the best home equity loan lenders.

Peer-to-Peer Lending

Peer-to-peer (P2P) lending allows you to get financing directly from another individual or company — rather than from a financial institution. The process to get a P2P loan is similar to that of a traditional loan, though P2P loans may have more flexible eligibility requirements.

Pros and Cons of P2P lending

Pros

• You may be able to find P2P lenders willing to approve borrowers with bad credit.
• Lenders often offer online applications and fast funding.

Cons

• These loans may have additional fees.
• Low credit can result in higher interest rates — potentially higher than those offered by banks or credit unions.

Getting a $20,000 loan is a big decision, so don’t make it without doing your research. Before comparing loans, decide whether a personal loan is the best financing option for you. Depending on your situation, there may be cheaper alternatives. Plus, you want to be sure you have room in your budget to repay a loan. Use a personal loan calculator to get a rough idea of what your monthly payments might look like.

If you do decide to take out a personal loan, start by comparing lenders. Finding a lender that offers a lower interest rate can save you thousands over the life of your loan. Plus, working with a trusted lender can save you more than just time and money. When in doubt, don’t be afraid to consult a trusted financial adviser or expert who can make suggestions based on your unique financial situation.

Our team put together a comprehensive100-point rating systemto evaluate personal loan companies. We gathered data points from 28 of the most prominent lenders in the U.S. and analyzed disclosures, licensing documents, sample loan agreements, marketing materials and websites. Our rating system takes into account four broad categories.

• Affordability(35%): How expensive each company’s loans are to pay back
• Loan features(35%): The breadth of loan terms and features available to prospective customers
• Customer experience(20%): Ease of application, prequalification and customer service interactions
• Company reputation(10%): An exploration of lenders’ Better Business Bureau files, customer reviews and outstanding regulatory actions

Our top-rated lenders may not be the best fit for all borrowers. To learn more,read our full personal loans methodology.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someoneyou trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.

*The full range of available rates varies by state. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.44% and a 8.64% origination fee of $864, for an APR of 22.88%. In this example, the borrower will receive $9,136 and will make 60 monthly payments of $257. APR is calculated based on 5-year rates offered in March 2023. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

**If you accept your loan by 5 p.m. EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education-related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.

***Your loan amount will be determined based on your credit, income and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).