How to Get a $20,000 Personal Loan

In 2023, the average personal loan borrower took out almost $20,000. Given the high interest rates on credit card debt, debt consolidation was a popular reason for needing a $20,000 personal loan. 

To get a $20,000 personal loan, you’ll need to meet certain criteria. Your lender may be choosy about who it lends to, but you can also do the same and shop around for the best loan options. We’ll show you how.

What lenders offer personal loans for $20,000?

Lender	Loan amounts
LightStream	$5,000 – $100,000
SoFi	$5,000 – $100,000
Upgrade	$1,000 – $50,000
Upstart	$1,000 – $50,000

Most personal loan lenders are willing to let you borrow $20,000 if you meet their underwriting guidelines. Many lenders have hard cutoff points for credit score and income, but they don’t advertise them. Other factors, such as your credit history, may also be important. 

Lenders weigh these factors when determining whether to approve you for a loan—and if so, what your personal loan limits will be and how much it will cost you. If your credit score and income aren’t high enough, you may not be approved, or your loan may be expensive. 

You can measure this cost using a loan’s annual percentage rate (APR), which considers how much you’ll pay in interest and fees. A loan’s APR is one of the best ways to compare your loan options. It’s an effective way to weed out predatory loans, which may charge APRs above 36%. 

Here are some top lenders that offer $20,000 personal loans.

LightStream – Best for excellent credit

View Rates

LendEDU rating: 4.8 out of 5

• Offers competitive rates for individuals with excellent credit.
• Maintains a zero-fee policy.
• Rewards strong credit histories.

LightStream is the premier choice for borrowers with FICO credit scores of 740 and better seeking a personal loan. It distinguishes itself by rewarding those with excellent credit through competitive interest rates and a no-fee policy, ensuring a cost-effective loan experience. 

LightStream is dedicated to providing financial solutions that acknowledge the value of a strong credit history, making it a top selection for financially responsible individuals aiming for an efficient borrowing process.

SoFi – Best for good credit

View Rates

LendEDU rating: 5.0 out of 5

• No required fees
• Same-day funding
• 3 rate discounts

SoFi excels for borrowers with FICO credit scores of 670 and up looking for versatile financing options for a loan. It allows for a personalized approach to meet each borrower’s unique financial situation. 

SoFi stands out by offering exclusive benefits to its members, blending affordability with flexibility. This makes SoFi an ideal choice for borrowers who seek a loan that not only meets their financial needs but also provides additional value through member-exclusive perks.

Upgrade – Best for fair credit

View Rates

LendEDU rating: 4.9 out of 5

• Evaluates a wide range of factors beyond credit scores.
• Provides access to financial tools and resources.
• Caters to a diverse range of credit profiles.

Upgrade is the optimal lender for individuals with FICO credit scores in the 580 to 669 range seeking to borrow $20,000. It recognizes the significance of factors beyond just credit scores, offering access to financial tools and resources that support borrowers not only in securing a loan but in managing it effectively. 

Upgrade is dedicated to fostering financial health and stability, making it the go-to option for those with fair credit who value a lender that supports their financial journey beyond the loan process.

Upstart – Best for thin credit

View Rates

LendEDU rating: 4.8 out of 5

• Uses artificial intelligence to assess applicants.
• Offers a modern approach to lending.
• Values nontraditional factors in credit assessments.

Upstart is the ideal lender for those with limited credit history in need of a loan. It leverages an innovative AI algorithm to evaluate factors beyond traditional credit scores, such as education and employment history, offering loan options to borrowers who might otherwise find it challenging to secure financing. 

Upstart says its minimum required credit score is 300—the lowest possible. Its modern approach to lending, which acknowledges the importance of nontraditional factors in assessing creditworthiness, makes it a terrific option for those new to credit or with thin credit files.

How to get a $20,000 personal loan

Lenders set their own requirements for loan approval and price these options differently. There’s no strict one-size-fits-all way to get a personal loan. 

However, the process is similar with most lenders. Here’s how it works and how you can improve your odds of getting approved for the funding you need:

1. Review your credit: Get a free copy of your credit report and review it for mistakes while you have time to correct it. Check your credit score, too, so you know your credit range and which lenders to target. 
2. Review your income, debts, and budget: Calculate your monthly debt-to-income ratio, which many lenders consider when approving you for a loan. Check your budget to see what you can afford for a payment each month, and don’t go beyond that. 
3. Gather supporting documents: Speed up your application later by getting everything you need ready right now. Save digital copies of documents showing your bank account balance, pay stubs, identification, recent tax returns, and any other income.
4. Get preapproved: It’s time to go loan shopping. Most lenders offer a simple online form where you can provide a few details about yourself and your financial situation. After a soft credit check, it will share your odds of approval and how much it may cost you. 
5. Apply for the loan: Choose the best $20,000 personal loan offer you can find and submit a full application. You’ll need the documents you rounded up earlier. Your lender may require other documents or details, so stay in touch. 
6. Loan decision: You’ll often get an instant decision through an automated system, although it could take a few days. If you’re approved, you’ll receive the funds. If not, you’ll get a written explanation of why you weren’t approved. 

How to repay a $20,000 personal loan

So you’ve gotten approved and received your funds—congratulations! Now what? In most cases, you’ll start owing your new loan payment within a month or two. Your lender will let you know your exact due date each month and when it starts. 

One of the most important factors in repaying your loan is never making a late payment. It could cause serious and long-lasting damage to your credit. We recommend signing up for autopay, so the minimum payment is drafted out of your account automatically with no need to worry about late fees or credit problems. 

Here are a few other tips to help you repay your personal loan:

• Pay extra: Paying above the minimum—every month or as you get extra cash—helps you pay off your loan sooner and save on interest. 
• Ask for help if you need it: Many lenders offer short-term forbearance, so you can skip a few payments if you encounter temporary difficulties. 
• Restructure your debt: You might be able to refinance your debt for a lower rate or a different term length by taking out a new personal loan to pay off your old one. 

What are the payments on a $20,000 personal loan?

The monthly payments on a $20,000 personal loan will vary depending on your interest rate and term length (i.e., how long you choose to repay your loan). These factors affect your monthly payment and the overall amount you pay for the loan. 

The longer your term length and the higher your interest rate, the more you’ll pay in total interest over time. Here’s a quick example of two $20,000 personal loans to see how it works:

Loan type	Short-term, low-interest	Long-term, high-interest
Term length	1 year	7 years
Rate	7.99%	35.99%
Monthly payment	$1,740	$655
Total interest	$876	$34,980

A personal loan calculator can help you estimate your monthly payments on a $20,000 personal loan. 

Pros and cons of a personal loan for $20,000

Pros

• Many online and local lenders to choose from.

• Using a personal loan to pay off credit card debt may boost your credit score.

• Unsecured personal loans are often faster to get than secured loans, with some lenders offering same-day funding.

• You don’t need to put up collateral for an unsecured personal loan that would be devastating for you to lose, such as your home or car.

• Taking out a personal loan can help you build credit as long as you pay on time.

Cons

• Your credit score can be damaged if you make any late payments, let alone default.

• You’ll need to meet certain credit or income requirements, which can be higher than for secured types of debt.

• The interest rates charged on unsecured personal loans are generally higher than for secured debts, such as home equity loans or auto loans.

• Borrowing money now reduces your ability to borrow later if you run into a financial emergency.

Other ways to borrow $20,000

If you can’t get approved for a $20,000 personal loan or aren’t sure it’s right for you, you may have other ways to borrow money. 

• Apply with a cosigner or co-borrower: Many of LendEDU’s partner lenders allow you to apply with another person, as long as they’re OK being responsible for paying off the loan too. 
• Crowdfunding: You may be able to raise the funds without needing to pay it back if you have a compelling story for why you need the money, such as paying emergency vet bills for your furry friend who suffered a mishap. 
• Use your home equity: If you’re fortunate enough to own a home with sufficient equity, you may be able to borrow against it more easily and for lower rates—but this can be risky because you could lose your home if you can’t repay the debt. 
• Use other collateral: Some banks and credit unions will offer secured personal loans using your savings account or certificate of deposit as collateral, making it easier to get approved for an affordable loan. 
• Grants and low-interest loans: Depending on your circumstances and why you need the money, you may be able to use a public grant or affordable loan to pay back medical expenses or other types of debt. 

FAQ 

What is the minimum credit score required to qualify for a $20,000 personal loan?

Credit score requirements vary by lender. Generally, you need a credit score of at least 660 to qualify for a $20,000 personal loan with competitive interest rates. Those with lower credit scores may still qualify but could pay higher interest rates.

Can I apply for a personal loan if I’m self-employed or have irregular income?

Yes, you can apply for a personal loan if you’re self-employed or have irregular income. Lenders scrutinize your income sources and may require additional documentation to verify your earnings, so prepare your tax returns and bank statements before application.

How long does it take to receive the funds once I’m approved for a personal loan?

Once approved, you can get the funds for a personal loan within a few business days. Some lenders offer same-day or next-day funding, but the time frame depends on the lender and your individual circumstances.

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

You can use most personal loans for any legal purpose, including consolidating debt, financing a large purchase, or covering a financial emergency. However, some lenders may place restrictions, so be sure to verify this.

What happens if I miss a payment on my personal loan?

If you miss a payment on your personal loan, you may pay a late fee. It could also lower your credit score. If you miss several payments, the lender could take legal action to recover the debt.

Can I pay off my personal loan early, and are there any penalties for doing so?

Many lenders allow you to pay off your personal loan early without penalty. However, some may charge a prepayment penalty. Check the terms and conditions of your loan agreement for details.

How do lenders determine the interest rate for a $20,000 personal loan?

Lenders determine the interest rate for a personal loan based on a variety of factors, including your credit score, income, debt-to-income ratio, and the loan term.