Lenders look at your credit score, income, and existing debts to decide how much they're willing to lend you.
This guide will show you exactly what factors affect your loan amount and help you figure out how much you might qualify for.
How Much Can You Borrow with a Personal Loan?
Personal loan amounts typically range from a few thousand dollars up to $100,000, but every lender has different limits. Some won't lend more than $50,000, while others are willing to go higher based on their risk appetite and your qualifications.
"Personal loan amounts vary depending on the lender, and the offers can change depending on who is taking out the loan," explains Bobby Ritterbeck, president and co-founder of online lender Best Egg. "Some lenders may be more willing to give larger loans out while others prefer to keep amounts on the smaller side to mitigate risk."
Pro tip: A lender's maximum loan amount doesn't guarantee you'll qualify for it—your actual loan offer will depend on your individual financial profile.
Factors That Determine Your Loan Amount
Just because a lender offers loans up to a certain amount doesn't mean you'll automatically qualify for the maximum. Your actual loan amount depends on several key factors:
Your Credit Score
"Your credit score is an important factor in determining approval, loan amounts, and interest rates. The higher your credit score, the more favorable the terms of your loan and the less risky you are considered by a lender," says Ritterbeck.
Your credit score is based on these five factors:
- Payment history: Whether you pay bills on time is the most important factor. A history of timely payments strengthens your score, while late payments and collections can damage it.
- Debt balances: High debt balances can hurt your credit score, while keeping balances low typically helps.
- Age of credit history: Longer credit histories are generally better than shorter ones, as they show you've successfully managed debt over time.
- Credit mix: Having different types of debt—like installment loans and credit cards—can boost your score. Having only one type or no debt at all may limit your score.
- Hard inquiries: Each credit check during a loan application can slightly lower your score, though the impact is minimal if you don't apply for multiple loans in a short period.
Your Income
Lenders need to see that you earn enough to handle monthly loan payments. Generally, higher income means you can qualify for larger loans, while lower income limits your borrowing potential.
Debt-to-Income Ratio
"Your debt-to-income ratio is a financial measurement that compares your monthly debt payments to your monthly income. It's often used to determine if someone can afford to take on more debt," explains Ritterbeck.
To calculate your DTI:
- Add up all your monthly debt payments
- Divide by your gross monthly income
- Multiply by 100 for your DTI percentage
A lower DTI means you can likely borrow more, while a high DTI limits your options. Most lenders prefer a DTI below 36%, though some may work with higher ratios.
How To Increase Your Borrowing Potential
There are several strategies you can use to improve your chances of qualifying for a larger personal loan:
Build Up Your Credit Score
The higher your credit score, the more likely you are to get approved for the loan amount you want. Here's how to boost your score before applying:
- Make payments on time: Pay all bills by their due dates to build a positive payment history and avoid score-damaging late payments.
- Keep credit utilization low: Maintain low balances on credit cards and lines of credit. Experts recommend staying below 30% of your credit limits on individual accounts and overall.
- Keep old credit cards open: Unless you need to close cards to control spending or avoid fees, keep them open. Older accounts help your credit score over time.
- Consider a credit builder loan: These loans let you build credit history while you pay off a loan before receiving the funds. They're easier to qualify for than traditional loans.
- Open a credit card: Making on-time payments builds credit. If you can't qualify for a regular card, try a secured card (requires a deposit) or become an authorized user on someone else's account.
- Monitor your credit report: Check your report regularly for errors and dispute any inaccuracies. You can get free weekly reports at AnnualCreditReport.com.
Pay Down Debt To Reduce Your DTI
Lowering your existing debt can improve your debt-to-income ratio and help you qualify for more money. Try these debt payoff strategies:
- Debt snowball: Focus on your smallest debts first while making minimum payments on others. Once paid off, move to the next smallest debt.
- Debt avalanche: Tackle your highest-interest debts first while making minimums on others. This saves the most money on interest over time.
- Debt consolidation: Combine multiple debts into one loan or balance transfer card, potentially at a lower interest rate.
- Negotiate with creditors: If you're struggling financially, contact your creditors about alternate payment plans or balance reductions.
- Avoid new debt: Don't take on additional loans or credit cards while paying down existing debt.
Increase Your Income
Earning more money naturally improves your DTI ratio. Consider asking for a raise or promotion, working additional hours, taking a second job, or starting a side business.
Get A Secured Personal Loan
Secured personal loans require collateral like a vehicle, savings account, or home. Because lenders can seize the collateral if you default, they may offer higher loan amounts at better rates.
How To Choose The Right Personal Loan
Banks, credit unions, and online lenders all offer personal loans, so it's important to shop around and compare prequalification offers from multiple lenders. Here's what to consider when taking out a personal loan:
- Loan amounts: Ensure the lender offers loans in the amount you need. If their range doesn't match your borrowing needs, look elsewhere.
- Borrower requirements: Each lender has different standards for credit score, income, and DTI. Understanding these requirements upfront helps you avoid applying with lenders unlikely to approve you.
- Interest rate: This determines how much you'll pay to borrow money. Even small rate differences can cost you hundreds or thousands of dollars over the loan's life.
- Loan term: Longer terms mean lower monthly payments but more interest paid overall. Shorter terms have higher payments but save money on total interest.
- Loan fees: Compare origination fees (deducted from your loan amount), late fees, and prepayment penalties. Some lenders charge no fees at all.
- Monthly payments: Only borrow what you can comfortably afford to repay. A payment that strains your budget increases your risk of default.
- Lender reliability: Research online reviews and news coverage. Too many complaints about customer service or business practices should raise red flags.
- Secured vs. unsecured loans: Secured loans may offer higher amounts but require collateral that you could lose. Unsecured loans typically offer smaller amounts but don't put your assets at risk.
"It's important to consider your specific financial goals and circumstances when selecting a loan and take into account factors such as the lender's eligibility criteria, loan terms, and amounts offered," says Ritterbeck. "After comparing multiple lenders' offerings, you can then choose one that offers the amount you're looking for and the best loan terms with criteria that you can meet."
Bottom Line
Your personal loan amount depends on your credit score, income, and debt-to-income ratio. While lenders may offer up to $100,000, improving these factors before applying will help you qualify for better amounts and terms.
Developing strong personal finance habits will set you up for success: pay bills on time, keep debt low, and monitor your credit regularly. These practices help you secure better loans and build long-term financial health.
Frequently Asked Questions
What's the maximum amount I can borrow with a personal loan?
Most lenders offer personal loans between $1,000 and $100,000, though some cap loans at $50,000. Your actual loan amount depends on your credit score, income, and debt-to-income ratio.
What credit score do I need for a personal loan?
Most lenders require a credit score of at least 580-600, but you'll get better rates and higher loan amounts with a score of 700 or above. Some lenders work with borrowers who have lower scores.
How quickly can I get a personal loan?
Many online lenders can approve and fund personal loans within 1-3 business days. Traditional banks and credit unions may take longer, typically 3-7 business days.
