Here’s How You Can Get a $15,000 Personal Loan

Taking out a personal loan is one way to borrow a significant amount of money in a lump sum. If you get a personal loan for $15,000, the lender gives you the cash upfront. You then pay back the $15,000 plus interest on a set schedule of fixed monthly payments.

You’ll have to meet a lender’s eligibility requirements, such as having enough income and strong enough credit, to get a personal loan.

To figure out if you need a $15,000 loan, think about how you intend to use the funds. “Often what we see is people consolidating outstanding credit card debt into a lower rate,” says David Brand, chief lending officer at Sharonview Federal Credit Union.

You might decide to use a loan for debt consolidation if it gives you a more affordable monthly payment or if it reduces your interest costs.

Another potential reason to take out a loan is to finance a purchase. Vicki Bogan, professor at the Sanford School of Public Policy at Duke University, divides purchases into critical needs, which you may have to borrow for, and optional items, which usually aren’t worth going into debt for.

Examples of critical needs include paying for car repairs so you can drive your car to work or repairing your roof so your home doesn’t suffer water damage.

In contrast, optional purchases are things that you could postpone without serious consequences, like vacations or parties. It’s often better to wait until you have enough money saved up before spending on these things, according to Bogan, because interest on the loan drives up the total cost of the purchase.

“You’re also going to be putting yourself in a more financially fragile position,” she says. “Once you’ve taken out a loan to go on a vacation, if your roof does start leaking and you need more money, you might not have the ability to borrow additional funds for something that’s actually critical.”

A personal loan application usually requires you to provide your name, Social Security number, government-issued photo ID and proof of residence. And you’ll need to tell the lender the reason you’re borrowing money.

Lenders look at your income to assess whether you could afford the loan payments. They also consider how stable your job is. An applicant who’s worked for the same employer for several years could have a better chance of getting approved than someone who recently switched careers or became self-employed, Brand says.

The lender checks your credit report to see how you’ve handled debt in the past. You are usually more likely to qualify if you’ve consistently made payments on time.

You also need to have an acceptable debt-to-income, or DTI, ratio, which is the amount you pay on your debts each month divided by your gross monthly income. The cutoff varies by lender. The Consumer Financial Protection Bureau suggests that homeowners should try to maintain a DTI ratio of 36% or less and that renters should try to keep the ratio at 15% to 20% or less.

It can be more challenging to get approved for a $15,000 loan than for a smaller amount because a larger loan presents more risk to the lender that you might not be able to repay.

If this is your first time borrowing, lenders will probably want to see you successfully pay back a small amount, such as several hundred dollars, before they’ll consider lending you $15,000. “Those larger loans are going to go to somebody with a more established credit history,” Brand says.

You might boost your odds of getting approved if you find a co-signer with good credit. A co-signer agrees to share the responsibility for repaying your loan and lowers the lender’s risk, which can help you get a loan that you wouldn’t qualify for by yourself.

In some situations, it makes sense to use another borrowing method instead of a personal loan.

If you own your home, one option is to take out a home equity loan, which has a set term and uses your home as collateral. “Generally, because that’s secured, you’ll have a slightly lower interest rate,” Bogan says. “And that’s always better for you when you’re trying to pay it back.”

Or you could consider a home equity line of credit, which is also secured by your home and might come with a lower interest rate than a personal loan. With a HELOC, you can borrow up to the limit you’re approved for, repay the debt and borrow again during the draw period, which is typically 10 years. After that, you enter the repayment period, which is typically 20 years.

A drawback of either a home equity loan or a HELOC is that if you fail to make payments, you can lose your home.

A credit card with a 0% promotional APR or balance transfer offer could be an interest-free alternative to a loan if you pay off the debt before the promotional period ends. But promotional rates on credit cards usually apply for just 12 to 18 months, so if you need a few years to repay the money, you are generally better off with a personal loan.

If you need money for a specific purchase – like a home appliance – you could try negotiating with the vendor. They might let you set up a payment plan, Bogan says.

Whether any particular loan is a good idea depends on how it will affect your finances.

Consider the cost of borrowing. “Compound interest really helps you in saving or investing, but that works against you when you’re taking out a loan,” Bogan says.

Look at the monthly payment and the interest rate to see if you can afford the loan, and do the math on how much interest you have to pay overall. For example, suppose you take out a $15,000 loan with a five-year term. As of July 10, 2023, the average rate on a five-year personal loan for well-qualified applicants with a credit score of at least 720 was 20.32%. That works out to $9,005 in interest over the life of the loan, so the total amount you have to repay is $24,005.

Pay attention to origination fees. Some lenders offer lower interest rates but charge high fees upfront. “If you pay the loan off early, you may avoid future interest, but you don’t get a refund of the fee,” Brand says.

The loan term also matters. A longer term generally means you pay more interest in total, but it gives you a smaller monthly payment. That could make the payment easier to afford if your income or expenses change sometime down the road.

And you should take into account how the loan will affect your credit. Applying for a personal loan results in a hard pull on your credit, which can slightly lower your score. Then, taking out a loan can cause your score to decrease because it adds to the debt you owe.

As you pay back the loan, late or missed payments can hurt your credit. But repaying the loan as agreed contributes to your positive payment history and might raise your score, particularly if you had limited credit or negative marks in the past.