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Personal Loans

How to Get a $5,000 Personal Loan

If you need $5,000 to finance a home repair, pay medical bills, consolidate debt, or cover another personal expense, a personal loan could offer the funds you need. Personal loans are flexible installment loans you can repay over several months or years. 

You can use a personal loan for almost any expense and choose from a variety of lenders, including banks, credit unions, and online loan providers. While borrowing requirements will vary by lender, you’ll generally need fair or good credit to qualify for a personal loan. 

Some lenders let you apply with a cosigner if your own credit isn’t up to scratch. Having good or excellent credit can help you qualify for the best interest rates on a personal loan, which often range from around 7% to as high as 36%. Here’s a closer look at how to get a $5,000 personal loan, including the steps you’ll need to take and our recommendations for the best lenders. 

What lenders offer personal loans for $5,000? 

Personal loan limits vary by lender, but most can fund personal loans for $5,000 or less. Qualifying for a $5,000 personal loan is not guaranteed, even if a lender offers that amount. A lender must approve your loan application. Most lenders base their decisions on factors such as your credit (often your FICO score), credit reports from all three credit bureaus, income, and debt-to-income ratio. 

Your financial profile, especially your credit, also determines your loan’s annual percentage rate (APR). Most personal loan lenders cap their maximum rates at 36%, considered the line between an affordable loan and an unaffordable one. Avoid predatory lenders that charge much higher rates or offer a loan without a credit check. 

To help you sort through your options, we’ve rounded up the top lenders that offer $5,000 personal loans. Here’s a closer look at each one. 

LenderRates (APR)Loan amounts
Credible7.49%35.99%1$600 – $200,000
LightStream7.49% – 25.49%$5,000 – $100,000
SoFi8.99% – 29.49%$5,000 – $100,000
Upgrade8.49% – 35.99%$1,000 – $50,000
Upstart7.8% – 35.99%$1,000 – $50,000

Credible – Best marketplace

LendEDU rating: 5.0 out of 5

  • Offers a variety of lenders in one place
  • Provides lending options for a range of credit scores
  • Transparent fees and costs

Credible is a comprehensive marketplace for those looking to secure a personal loan. It makes the loan search process straightforward by offering access to several lenders through a single platform. This feature saves time and effort by eliminating the need to visit multiple lenders’ websites. 

Regardless of your credit score, Credible offers a variety of lending options, making it easier for individuals with diverse financial backgrounds to find suitable loans. The platform is known for its transparency, ensuring that users are well-informed about fees and costs associated with their loan options so they can make educated decisions.

Navigating the landscape of personal loans can be complex, but Credible simplifies this experience. By consolidating offers from various lenders, it caters to a wide range of financial needs and credit situations. Whether you’re looking to consolidate debt, finance a major purchase, or cover unexpected expenses, Credible’s marketplace can provide tailored options.

LightStream – Best for excellent credit

LendEDU rating: 4.8 out of 5

  • Competitive interest rates
  • No fees
  • Quick online application process

LightStream distinguishes itself as the go-to lender for individuals with FICO credit scores at and above 740. It offers competitive interest rates, which can lower the cost of a loan for those who qualify. LightStream’s commitment to no fees, including origination and prepayment penalties, sets it apart, providing a more affordable borrowing experience. The efficient online application process streamlines loan approval, making funds accessible to borrowers.

The advantages of choosing LightStream extend beyond cost savings. Borrowers with excellent credit will find that LightStream’s seamless service and straightforward application process offer a hassle-free way to secure financing. 

Whether for home improvement, a major purchase, or debt consolidation, LightStream tailors its loan products to meet the needs of borrowers with strong credit profiles. Its focus on customer satisfaction and transparent lending practices reinforces LightStream’s position as a preferred lender for those with impeccable credit.

SoFi – Best for good credit

LendEDU rating: 5.0 out of 5

  • No origination fee required
  • Supports a range of credit scores
  • Financial education resources

SoFi earns a perfect LendEDU rating for its favorable terms and services catered to borrowers with FICO credit scores of 670 and up. Unlike many other lenders, SoFi does not require origination or late fees, making it a cost-effective option for loan seekers. The platform supports a wide spectrum of credit scores, ensuring that a broad audience can access competitive loan offers. 

Beyond lending, SoFi distinguishes itself by offering comprehensive financial education resources, empowering borrowers to make informed financial decisions and manage their loans effectively. For individuals with good credit, SoFi represents more than just a lending platform; it’s a financial partner. The lender’s commitment to customer education and financial wellness is evident through its provision of tools and resources designed to enhance financial literacy. 

Borrowers benefit from SoFi’s community events and personalized support, which add value beyond the immediate financial benefits of a loan. With its blend of competitive rates, lack of fees, and focus on financial empowerment, SoFi stands out as a prime choice for borrowers looking to maximize their financial health.

Upgrade – Best for fair credit

LendEDU rating: 4.9 out of 5

  • Provides lending options for a range of credit scores
  • Flexible loan terms
  • Free credit monitoring

Upgrade offers a promising option for individuals with FICO credit scores between 580 and 669. Recognizing the challenges borrowers with less-than-perfect credit scores can face, Upgrade provides a range of lending options with flexible terms. This approach allows individuals with fair credit to find loans that suit their needs while improving their credit scores. 

Upgrade demonstrates its commitment to financial education through its free credit monitoring service, which helps borrowers manage their financial health and make progress toward better credit. Upgrade’s inclusive lending model and supportive services cater to a demographic often underserved by traditional lenders. 

By offering loans with adaptable terms and the added benefit of free credit monitoring, Upgrade not only facilitates access to necessary funds but contributes to borrowers’ financial stability and growth. This lender’s approach to serving individuals with fair credit exemplifies its commitment to financial inclusivity and empowerment, making Upgrade a standout choice for those seeking to improve their financial situation.

Upstart – Best for little to no credit

LendEDU rating: 4.8 out of 5

  • Considers educational and job history in addition to credit
  • Offers quick loan approval
  • 100% online process

Upstart is our top choice for individuals with thin or limited credit histories. By considering factors beyond traditional credit scores, such as education and job history, Upstart broadens access to credit for those conventional lenders might overlook. This unique underwriting approach enables Upstart to offer quick loan approvals through a 100% online process, making it a convenient and efficient solution for borrowers.

The platform’s emphasis on alternative data in the credit assessment process is advantageous for younger borrowers or those who may not have had the opportunity to build a substantial credit history. Upstart’s method acknowledges the potential of applicants by evaluating their education and employment, offering a more holistic view of an individual’s financial responsibility.

Upstart’s commitment to an inclusive and streamlined lending experience makes it a standout choice for those with thin credit. The ease of use, combined with the consideration of nontraditional credit indicators, ensures that borrowers receive fair and fast evaluations.

How to get a $5,000 personal loan 

To get a $5,000 personal loan, here are the general steps you’ll need to take: 

  1. Learn about eligibility requirements: While every lender is different, most require you to have a minimum credit score, income, and debt-to-income ratio to qualify for a personal loan. Researching these requirements can help you find a lender that will be a good fit. 
  2. Check your credit: Credit plays a large role in the loan approval process, so check your credit before you start applying. A fair credit score starts at 580 in the FICO scoring range, while a good credit score is 670 or higher. 
  3. Prequalify with more than one lender: Many lenders let you check your rates via prequalification, which only takes a minute or two, can be completed online, and won’t affect your credit. You’ll get a preview of your rates and terms, though your final offer could change after you officially apply. 
  4. Compare loan offers: Review the details once you receive a few prequalification offers. Look for a loan with a competitive interest rate, low fees, and repayment terms that work for your budget. A personal loan calculator can help you estimate your monthly payments and long-term costs. 
  5. Submit your loan application: Your next step is to fill out and submit your official personal loan application, which you can often do online. You’ll provide your personal information and some verifying documentation, such as pay stubs, bank statements, and a copy of your ID. 
  6. Receive your loan and start repayment: Some lenders can approve and disburse your loan the same day you apply, while others take a few days or weeks. Once your application is approved, the lender will send it to your bank account or issue a check. Read over your loan agreement to find out when your first payment is due. 

How to repay a $5,000 personal loan 

After borrowing a personal loan, you’ll pay it back in monthly installments over a set period. Depending on your lender, you may get to choose terms between one and 12 years. 

A shorter term will mean higher monthly payments, but you’ll get out of debt faster and pay less interest on your loan. By contrast, a longer term can reduce your monthly payments but increase your total interest charges in the long run. 

If you’re looking to reduce your interest costs, you could make extra payments on your loan’s principal to pay it off faster. Most lenders don’t charge a penalty for prepaying a personal loan. 

Setting up automatic payments from your bank account can also help ensure you don’t miss any payments. 

What are the payments on a $5,000 personal loan?

Your payments on a $5,000 personal loan will depend on your interest rate and repayment terms. A higher rate and a longer loan term will increase your borrowing costs, while a lower rate and shorter term will lower them. 

Let’s say, for example, you borrow $5,000 at a 12% interest rate. This chart compares your monthly payments and long-term interest costs on different terms: 

Loan termMonthly paymentsTotal interest costs 
1 year$444$331 
2 years$235$649
3 years $166$979
4 years$132$1,320
5 years$111$1,673

As you can see, a longer repayment term can increase your total interest costs. Try to strike a balance between a repayment term that won’t cause excessive interest charges and a loan with a monthly payment you can afford. 

Pros and cons of a personal loan for $5,000 

Before borrowing a $5,000 personal loan, consider these pros and cons. 

Pros

  • Can be used for almost any purpose

    Personal loans are flexible, with common restrictions being that you can’t use the loan for investing, gambling, or higher education.

  • May come with a competitive rate

    Creditworthy borrowers might be able to access rates starting around 7% or 8% (as of April 2024) and avoid loan origination fees.

  • Choice of repayment terms

    Depending on the lender, you may get to choose from a range of terms, allowing you to pick the debt payoff timeline that works best for you.

Cons

  • Approval criteria may be tough to meet

    Personal loans tend to be unsecured, meaning they don’t require collateral. Instead, a lender relies on your credit and income when making a decision. If you have thin or weak credit, it may be difficult to qualify for a $5,000 personal loan.

  • Bad credit could mean a high rate and fees

    Poor credit could also mean you end up with an interest rate as high as 36%, which might include an origination fee of up to 10% of your loan amount.

  • Late payments can damage your credit

    Lenders report missed payments to the credit bureaus, so not paying your personal loan bills can harm your credit.

Other ways to borrow $5,000 

If you’re looking for alternatives to a $5,000 personal loan, here are other financing options to consider: 

  • Credit card: Depending on your credit limit, you may be able to charge $5,000 to your credit card. Be sure you understand the costs. Credit cards can have high interest rates. If you qualify for a 0% APR credit card, you may be able to avoid interest by paying it off before the promotional period ends. 
  • Home equity loan or HELOC: Homeowners may also consider drawing on their home’s equity with a loan or line of credit. Borrowing against your home can be an affordable way to access cash, but the bank can foreclose on your home if you don’t pay back the amount.  
  • Friend or family loan: Close friends or family members may also be able to offer a $5,000 loan. If you go this route, make sure to have a clear discussion about repayment expectations. 
  • Cosigned or secured personal loan: While qualifying for an unsecured personal loan can be challenging if you have bad credit, you may have an easier time getting approved if you add a cosigner or collateral to your loan. Just keep in mind that the loan will affect your cosigner’s credit, and you could lose your collateral if you don’t make payments on time. 

FAQ 

What is the minimum credit score required to qualify for a $5,000 personal loan?

While every lender sets its own criteria, a credit score of 600 or above might be required to qualify for a $5,000 personal loan.

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

Yes, you can still apply for a personal loan if you’re self-employed or have an irregular income. You may need to provide additional documentation to prove your income and ability to repay the loan.

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

Once you’re approved, most lenders will disburse the funds within two business days. However, the actual time frame can vary by lender.

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

Generally, you can use a $5,000 personal loan for any purpose, except for illegal activities or investments. However, every lender may have unique restrictions, so it’s crucial to confirm with your lender.

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

If you miss a payment, you might owe a late fee. Continued missed payments can damage your credit score and may lead to loan default.

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

Most lenders will allow you to pay off your loan early. While rare, some might charge a prepayment penalty, so check with your lender to clarify its policy.

How do lenders determine the interest rate for a $5,000 personal loan?

Lenders determine the interest rate based on several factors, including your credit score, income level, employment status, and whether the loan is secured or unsecured.

Recap: Lenders offering $5,000 personal loans

Lender or marketplaceRates (APR)Loan amounts
Credible7.49%35.99%1$600 – $200,000
LightStream7.49% – 25.49%$5,000 – $100,000
SoFi8.99% – 29.49%$5,000 – $100,000
Upgrade8.49% – 35.99%$1,000 – $50,000
Upstart7.8% – 35.99%$1,000 – $50,000