Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Personal Loans How to Get a $40,000 Personal Loan Updated Apr 09, 2024 11-min read Expert Approved Expert Approved This article has been reviewed by a Certified Financial Planner™ for accuracy. Written by Rebecca Lake, CEPF® Written by Rebecca Lake, CEPF® Expertise: Student loans, mortgages, home-buying, credit, debt, personal loans, education planning, insurance, investing, small business Rebecca Lake is a certified educator in personal finance (CEPF®) and freelance writer specializing in finance. Learn more about Rebecca Lake, CEPF® Reviewed by Erin Kinkade, CFP® Reviewed by Erin Kinkade, CFP® Expertise: Insurance planning, education planning, retirement planning, investment planning, military benefits, behavioral finance Erin Kinkade, CFP®, ChFC®, works as a financial planner at AAFMAA Wealth Management & Trust. Erin prepares comprehensive financial plans for military veterans and their families. Learn more about Erin Kinkade, CFP® Personal loans allow you to borrow a lump sum and repay it over a set term with interest. Qualifying for a personal loan often depends on your credit scores and income, but lenders may consider other factors. Traditional banks, credit unions, and online lenders can offer personal loans to eligible borrowers. You might be interested in a $40,000 personal loan if you need to fund a large purchase, such as a wedding or a major home improvement project. You could also use a $40,000 personal loan to consolidate credit cards, medical bills, and other debts or start a business. To get a personal loan of this size, you’ll need to find the right lender. Find out what options you might have for getting a $40,000 personal loan and what you can do to improve your chances of approval. Table of Contents Skip to Section What lenders offer personal loans for $40,000?How to get a $40,000 personal loan How to repay a $40,000 personal loan Pros and cons of a personal loan for $40,000Other ways to borrow $40,000 FAQ What lenders offer personal loans for $40,000? Personal loan limits vary by lender. At the low end, the minimum low may be as little as $1,000. Some lenders offer up to $200,000 in personal loan funding. When deciding how much to loan, lenders consider credit scores and other financial details. The loan purpose may play a part in the decision, but not always. Credit scores can also influence the annual percentage rate (APR) you pay for a personal loan, with a higher score translating to a lower rate. Below, you’ll find five recommendations for lenders and marketplaces where you can find $40,000 personal loans. When comparing options, remember to watch out for predatory lenders that advertise personal loans with no credit check required but charge steep interest rates or fees. LenderRates (APR)Loan amountsCredible7.49% – 35.99%$600 – $200,000LightStream7.49% – 25.49%$5,000 – $100,000SoFi8.99% – 29.49%$5,000 – $100,000Upgrade8.49% – 35.99%$1,000 – $50,000Upstart7.8% – 35.99%$1,000 – $50,000 Credible – Best marketplace View Rates LendEDU rating: 5.0 out of 5 Compare prequalified rates1Simple and easy-to-use platformExceptional customer service Credible is a marketplace for comparing prequalified rates from multiple lenders with one application. There are no fees for using the service, and you only need a soft credit check to see your options. LightStream – Best for excellent credit View Rates LendEDU rating: 4.8 out of 5 Borrow $5,000 to $100,000Loan terms of up to 12 yearsExpedited loan approval and disbursement process LightStream caters to consumers with credit scores of 740 and higher. This lender differentiates itself with competitive interest rates and a range of loan amounts to accommodate borrowers with diverse financial requirements. Because this lender doesn’t allow borrowers to prequalify with a soft credit inquiry, we think it’s best for those with pristine credit who are confident they’ll be approved. What sets LightStream apart is its efficient loan approval and disbursement procedure. The company understands the urgency of financial needs and responds with speed, ensuring that funds are available without unnecessary delay. This efficiency, combined with the favorable terms, makes LightStream a preferred lender for individuals with excellent credit scores. SoFi – Best for good credit View Rates LendEDU rating: 5.0 out of 5 Offers loan preapprovalFree financial advisingNo origination or late fees SoFi stands out as our top option for those with credit scores of at least 670. Unlike many traditional lenders, SoFi acknowledges the broader financial needs of its customers by providing preapproval for loans and complimentary financial advising. This approach not only empowers borrowers with a clear understanding of their loan options but also equips them with the knowledge to make informed financial decisions. SoFi charges no origination or late fees, reflecting its commitment to a transparent and borrower-friendly experience. This policy, combined with its additional services, underscores SoFi’s dedication to supporting its customers’ financial health beyond providing loans. Upgrade – Best for fair credit View Rates LendEDU rating: 4.9 out of 5 Allows joint applicationsOffers hardship programsFast loan approval For individuals with credit scores between 580 and 669, Upgrade may be a welcome option. The lender addresses the unique challenges this group may face by allowing joint applications and offering specialized hardship programs. These features demonstrate an understanding of the nuances of credit and the importance of flexibility in financial products. Upgrade’s commitment to accessibility extends to its loan approval process’s speed and efficiency. By minimizing wait times and simplifying the application process, Upgrade ensures that borrowers with fair credit have quick access to the funds they need while providing support mechanisms for those facing financial difficulties. Upstart – Best for little to no credit View Rates LendEDU rating: 4.8 out of 5 Considers factors other than credit scores for eligibilityOffers a variety of loan optionsQuick loan disbursement Upstart is an innovative lending solution for individuals with thin or minimal credit histories. The platform stands out by considering a variety of factors beyond traditional credit scores to assess eligibility, offering a more inclusive lending model. This approach broadens the horizon for borrowers the financial mainstream might otherwise exclude. Upstart ensures that funds are available fast to meet borrowers’ needs. By providing a range of loan options and prioritizing speedy service, Upstart addresses the immediate financial needs of its customers, making it a leading choice for those with limited credit experience. How to get a $40,000 personal loan Lenders set the eligibility requirements for who can get a $40,000 personal loan. For example, you may need to meet: Minimum credit score requirementsMinimum income requirementsDebt-to-income (DTI) ratio requirements If you’re applying for a secured personal loan, you’ll also need something of value to offer as collateral. Some lenders disclose these requirements online, but others are less transparent about what they expect from borrowers. With that in mind, here’s what the process and time frame for getting a $40,000 personal loan look like. Check your credit. Reviewing your credit scores can give you a better idea of which lenders you have the best chances with. You may want to allow 30 minutes to review your credit history to see what’s helping or hurting your score. Estimate loan payments. If you plan to borrow $40,000, it helps to know what your payments might look like. You can estimate monthly payments for different loan terms using an online loan calculator. This step may take 15 to 30 minutes. Compare lenders. Next, you can block off an hour or so to compare personal loan lenders. Consider the minimum and maximum loan limits, interest rates, fees, and eligibility requirements. Get rate quotes. It’s helpful to get rate quotes from at least three lenders to help you narrow down which loan you want to apply for. This step is quick; you can often get quotes online in minutes. Choose a lender and apply. Once you decide on a lender, you can apply for the loan. If you’re doing this online, it may take 10 to 15 minutes. You’ll need to share personal and financial information with the lender and agree to a hard credit check if one is required.Wait for approval. Some lenders offer near-instant approval for personal loans, but others may take a few hours or a few days to get back to you. If the lender requires additional information to process your application, that could delay the process.Accept the loan and get funded. Assuming you’re approved for a $40,000 personal loan, the final steps are signing the paperwork and telling the lender where to deposit the money. Signing paperwork may take just a few minutes, and you might be able to get loan funds in your bank account as soon as the next business day. How to repay a $40,000 personal loan You’ll repay your loan according to your lender’s terms. Most often, that means making monthly payments on an agreed-upon date each month. Your lender should give you an amortization schedule that shows: How much of your payment goes to the principalHow much goes to interestThe number of payments you’ll makeThe date of each payment If you’d like to pay your loan off early to save on interest, here are strategies to try. Pay biweekly. Paying half your monthly payment every two weeks allows you to make one full extra payment to your loan annually. Enroll in autopay. Many personal loan lenders offer an interest rate discount when you enroll in automatic payments. This is a simple way to pay less in interest. Consider refinancing. Refinancing a personal loan means taking out a new loan to replace the old one. This could make sense if you can get a lower interest rate. Be aware that choosing a longer loan term could mean paying more in interest overall.Make lump-sum payments. If you earn work bonuses, tax refunds, or other windfalls, you could apply them to your loan as a lump sum payment. Just be sure to indicate to the lender that you’re making an extra payment to the principal, not the interest. Tip Read the fine print on your loan agreement to ensure your lender won’t penalize you for paying your loan off early, or contact customer service to ask. This is uncommon, but it happens. What are the payments on a $40,000 personal loan? The payments on a $40,000 personal loan depend on the loan interest rate and the repayment term. Here’s what payments might look like for a $40,000 personal loan with different terms. Loan term + interest rateMonthly paymentTotal interest paid24 months at 12.99%$1,901.49$5,635.54 36 months at 11.99%$1,328.38$7,821.7348 months at 10.99%$1,033.63$9,614.0860 months at 9.99%$849.68$10,981.1072 months at 8.99%$720.82$11,899.2584 months at 7.99%$623.25$12,352.94 As you can see, a shorter loan term means a higher monthly payment but less interest paid overall. Even if a loan with longer terms has a lower interest rate, the total interest paid can end up being greater. Pros and cons of a personal loan for $40,000 Is a $40,000 personal loan right for you? Looking at the pros and cons can help you decide. Pros A $40,000 loan could allow you to fund major goals, whether it’s a complete kitchen renovation or starting your dream business. Many lenders offer unsecured personal loans, so you could borrow $40,000 without needing collateral. Making on-time payments to a large loan can help you build or rebuild a positive credit history. You may be able to choose a longer loan term, so you have more time to repay what you borrow. Cons It may be harder to qualify for a large personal loan with poor credit or nonexistent credit. Choosing a longer loan term to get lower payments is a trade-off because you’ll likely pay more interest overall. You may need to borrow more than $40,000 if the lender requires a sizable origination fee. Failing to make loan payments on time could damage your credit. Other ways to borrow $40,000 If you need $40,000, you have other options besides personal loans. Here are four possibilities to consider: Get a $40,000 home equity loan or line of credit (HELOC)Borrow from your 401(k) or make an early withdrawal from an IRAAsk friends and family for a loanSeek out peer-to-peer (P2P) loans Each option has pros and cons. With a home equity loan or HELOC, for example, your home is collateral for the loan. If you don’t pay, you risk losing the property. Taking money from your 401(k) or IRA shrinks your retirement nest egg and may trigger tax penalties, which could get expensive. Borrowing from friends and family might get awkward if you can’t pay it back or pay it back at a slower pace than they expect. Peer-to-peer loans, meanwhile, may carry higher interest rates and fees than standard personal loans. If you can’t get a loan by yourself, consider asking someone to sign on to the loan as a cosigner or co-borrower. You could also get a lower rate if they have excellent credit. FAQ What is the minimum credit score required to qualify for a $40,000 personal loan? The minimum credit score to qualify for a $40,000 personal loan may depend on the lender’s criteria. Typically, you’ll need a good to excellent credit score—at least 670—to secure a personal loan of this size. 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 an irregular income. Lenders typically require proof of consistent income, even if it’s irregular. It may examine your tax returns and bank statements to verify your earnings. How long does it take to receive the funds once I’m approved for a personal loan? Once approved, you can expect the funds from your personal loan to be deposited into your account within a few business days. However, the actual time frame can vary from lender to lender. Are there any restrictions on how I can use a personal loan? Generally, you can use personal loans for almost any purpose, including consolidating high-interest debt, financing home renovations, or covering major expenses. However, some lenders may have restrictions, so it’s essential to check with your lender. What happens if I miss a payment on my personal loan? If you miss a payment, you could face a late fee, and your credit may take a hit. Prolonged delinquency could lead to loan default. Always contact your lender if you foresee difficulties making a payment. Can I pay off my personal loan early, and are there any penalties for doing so? Most lenders allow borrowers to pay off their loans early. However, some can charge a prepayment penalty for doing so. Always check your loan agreement for details on early repayment. How do lenders determine the interest rate for a $40,000 personal loan? A range of factors, including your credit score, income history, employment status, loan term, and overall market conditions, determine your interest rate. Recap of lenders offering $40,000 personal loans LenderRates (APR)Loan amountsCredible7.49% – 35.99%$600 – $200,000LightStream7.49% – 25.49%$5,000 – $100,000SoFi8.99% – 29.49%$5,000 – $100,000Upgrade8.49% – 35.99%$1,000 – $50,000Upstart7.8% – 35.99%$1,000 – $50,000 1 Prequalified rates are based on the information you provide and a soft credit inquiry. Receiving prequalified rates does not guarantee that the Lender will extend you an offer of credit. You are not yet approved for a loan or a specific rate. All credit decisions, including loan approval, if any, are determined by Lenders, in their sole discretion. Rates and terms are subject to change without notice. Rates from Lenders may differ from prequalified rates due to factors which may include, but are not limited to: (i) changes in your personal credit circumstances; (ii) additional information in your hard credit pull and/or additional information you provide (or are unable to provide) to the Lender during the underwriting process; and/or (iii) changes in APRs (e.g., an increase in the rate index between the time of prequalification and the time of application or loan closing. (Or, if the loan option is a variable rate loan, then the interest rate index used to set the APR is subject to increases or decreases at any time). Lenders reserve the right to change or withdraw the prequalified rates at any time.