How Much of a Personal Loan Can I Get? Top Factors

Typically, the maximum amount for a personal loan ranges from $500 to $100,000, but loan amounts can vary among different lenders. The amount you qualify for is influenced by your credit score, income and debt-to-income (DTI) ratio, alongside the lender’s own criteria.

To get the most accurate picture of how much of a personal loan you can get, you’ll need to apply with several lenders.

Key Takeaways

• Most personal loans range from $500 to $100,000, but how much you qualify for depends on your financial profile. Credit score, income, DTI ratio and employment history all play a role in what lenders will approve.

• A DTI ratio above 43% can disqualify you, and most lenders prefer 35% or lower. Paying down existing debt before applying is one of the most effective ways to improve your borrowing power.

• Secured loans typically allow you to borrow more than unsecured loans. Offering collateral reduces lender risk, but it also means you could lose that asset if you default.

• Only borrow what you need, and compare loan terms carefully before committing. A longer repayment term lowers monthly payments but increases the total interest paid over the life of the loan.

Summary generated by AI, verified by MoneyLion editors

6 Factors That Affect How Much Money You Can Borrow

1. DTI Ratio

Your DTI is the ratio between total monthly debt obligations — including mortgage or rent payments, student loans, auto loans and other debt — and total monthly income.

Lenders usually won’t approve a personal loan if your DTI ratio is above 43%, and some look for a DTI of 35% or less. 

2. Credit Score

The higher your credit score, the better the possibility of a high loan amount and lower interest rates. However, other factors and lender criteria can affect this.

Aim for a “good” credit score of 670 to 739 or a “very good” credit score of 740 or higher for increased chances of a higher loan. 

You can access your full credit report from the three major credit bureaus, TransUnion, Experian and Equifax, at AnnualCreditReport.com. If your credit report contains incorrect information, you can dispute it. 

3. Income

A higher income can lead lenders to feel confident that you can meet the monthly payments.

While no rules are set in stone, if you’re earning less, even if you don’t have significant debt, lenders may only approve a small personal loan or even deny your application.

4. Employment History

Since loan repayment depends on income, the lender may not want to take a chance on you if you have a low salary or an unstable income.

If you’re self-employed, you may need to provide additional documentation to prove your income history. 

5. Secured Loan vs. Unsecured Loans

While lender policies differ, you can generally get a larger loan if you opt for a secured loan rather than an unsecured loan. A secured loan gives the lender collateral to recover the loan amount in case you default on the loan, reducing the lender’s risk of loss.

Of course, with a secured loan, you risk losing whatever collateral you used to get the loan — often a house, car or other asset — if you cannot repay the loan on time. 

6. Loan Purpose

Some lenders will offer better rates or longer terms for specific purposes such as home improvement. On the other hand, if you apply for a debt consolidation loan, you're less likely to get favorable terms.

However, this varies by lender, which is why it’s important to shop around and compare rates to find the best current offers. 

How To Calculate How Much You Can Borrow

The amount you can borrow will depend on your financial situation, credit score and lender policies.

Start by calculating how much the loan will cost you each month. Make sure you include potential interest on the loan, lender fees and your desired loan length.

How Loan Term Affects the Cost

A longer loan term will mean lower monthly payments but more interest over the loan’s lifetime. For example, your monthly costs and total interest on a $10,000 loan with a 10% interest rate will vary by loan term. 

• Five-year term: If you choose a 5-year loan term, you’ll pay $212.47 every month for five years, for a total of $2,748.23 in interest. 

• One-year term: If you choose to repay the same loan over one year, you will need to pay $879.16 every month for a year. But you’ll only have to pay $549.91 in interest. 

While the first option has more affordable monthly payments, you’ll pay much more for that convenience. To save more long term, calculate as much as you can reasonably afford toward your monthly loan without putting your other expenses at risk to keep total costs down. 

Quick Budget Example

• Imagine you earn $5,000 monthly before taxes.

• If you have a monthly mortgage payment of $1,500 plus other fixed expenses of another $1,000, paying off the loan in one year might put too much strain on your budget.

• In that case, taking the longer term and asking the lender for a loan without an early repayment penalty can allow you to pay more whenever your budget allows.  

How To Choose the Right Personal Loan

Choosing a loan amount that fits your financial situation and repayment ability is a personal decision. However, knowledge is power. The more you can compare lenders and research current interest rates, the more prepared you’ll be to choose a loan that fits your budget.  

In addition to carefully shopping for personal loans, it’s essential to read the terms and conditions of the loan agreement before signing. 

Other tips for choosing the right personal loan:

• Check the lender reputation and client reviews.

• Compare maximum loan amounts from various lenders.

• Consider alternative specialized loans like student debt refinancing or a home equity loan, if they fit your situation. 

• If you have factors working against you, like a low credit score, there are still options available. Consider personal loans for bad credit or working to increase your credit score before applying.

Final Notes on How Much You Can Borrow

• Factors such as your DTI ratio, credit score, total income, employment history and even the loan purpose can affect the amount you can get for a personal loan.

• Beyond that, personal loan amounts vary depending on your chosen lender and overall financial situation when you apply.

• Remember only to borrow enough for the expense, as repaying the loan with interest can lead to greater financial strain long term. 

• You can use a personal loan calculator to see how different amounts, interest rates and terms could affect your monthly payment and determine what you can comfortably afford.

FAQs 

What is the minimum and maximum loan amount available for a personal loan?

Individual lender policies differ, but most have maximum personal loans ranging from $500 to $100,000. 

Can I increase my chances of getting a higher personal loan amount?

Yes, you can increase your chances of getting a higher personal loan by paying off debt, improving your credit score, or increasing your income. You can also consider a secured loan. 

Are there any restrictions on how I can use the personal loan funds?

No, normally, there aren’t any restrictions on how you can use personal loan funds. However, your loan agreement may prohibit you from using the money for certain expenses, like gambling or college tuition. In addition, the lender might have restrictions if you apply for a personal loan for a specific purpose.

Key Terms

• DTI ratio: The percentage of your gross monthly income that goes toward existing debt payments. Most lenders cap approval at a DTI of 43%, with many preferring 35% or lower.

• Credit score: A numerical rating that reflects your borrowing history and likelihood of repaying debt. A score of 670 or higher generally improves both approval odds and the loan amount you can access.

• Secured loan: A loan backed by collateral such as a home or car. Secured loans typically allow for larger borrowing amounts and lower interest rates, but put your asset at risk if you default.

• Loan term: The length of time you have to repay a loan. Longer terms mean lower monthly payments but more total interest paid, while shorter terms cost less overall but require higher monthly payments.

• Early repayment penalty: A fee some lenders charge if you pay off a loan before the end of its term. Choosing a loan without this penalty gives you the flexibility to pay more when your budget allows.

Summary generated by AI, verified by MoneyLion editors

Sources

• Consumer Financial Protection Bureau. 2023. "What is a debt-to-income ratio?"

• Consumer Financial Protection Bureau. 2024. "What is a prepayment penalty?"