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What You Need to Know About $10,000 Personal Loans

What You Need to Know About $10,000 Personal Loans
Lauren Ward
Lauren WardUpdated September 9, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you’re anticipating a major expense such as home renovations or a wedding, you may be considering taking out a $10,000 personal loan. In that case, it’s smart to explore the different options available to you. Each lender has different qualification requirements, and interest rates and loan terms can vary.  What you may qualify for depends in large part on how strong your credit is. Read on to learn more about $10,000 personal loans and how they work.

What Are Some Reasons to Get a $10,000 Loan?

A $10,000 personal can cover a number of major expenses. Here are some common uses for a personal loan for up to $10000. 
  1. Wedding expenses: Today’s weddings are costly. It’s not uncommon for couples to spend thousands of dollars on the venue alone. There are loans for a wedding that can help you cover these expenses so that your big day can be perfect.
  2. New car: When you’re buying a car, you typically have a number of loan options, including financing through the dealership, getting a loan from your bank, or taking out a personal loan. Compare rates and terms to see which option is best for you. If you’re purchasing a car from a private seller, a personal loan might make sense. But again, you’ll want to shop around to see what type of loan best suits your needs.
  3. Vacations: Want to book a month-long vacation at the beach? Or take a two-week cruise overseas? Personal loans can be used to pay for a vacation.
  4. Emergency funds: A sudden emergency, like a medical crisis, could mean that you need access to funds quickly. A personal loan for emergencies can help you cover unexpected expenses.   
  5. New appliances: If you need to replace broken appliances like a refrigerator or oven, you can use a $10,000 loan to purchase these essentials. 
  6. Home renovation: Whether you want to renovate your bathroom or put new flooring in your house, a home improvement loan is a potential financing option.
  7. Moving expenses: It’s expensive to move, even if you’re only moving across town. You can take out a loan to cover the costs, including hiring professional movers.  
  8. Debt consolidation: If you have outstanding debt like unpaid credit cards or other bills, you can use a personal loan to consolidate your debt and pay it off. You may be able to get a better interest rate on a $10,000 personal loan than the interest rate on your credit cards, which could help save you money down the road. 

Typical $10,000 Loan Terms

Terms for a $10,000 personal loan vary. The terms depend on your creditworthiness as well as the lender you choose to work with. These factors will affect your interest rate, any fees charged, and the length of the repayment period. 

$10,000 Personal Loan Monthly Payments

You’ll make monthly payments on your $10,000 loan. The amount you’ll pay depends on your interest rate and the period of time you have to pay off the loan.For instance, let’s say your repayment period is five years and your interest rate is 9.99%. In this case, your estimated payment would be $212 a month. However, each borrower will have a different monthly payment depending on their credit profile, which helps determine their interest rate.  

Qualifying Criteria for a $10,000 Personal Loan

Here’s what lenders look at when you apply for a $10,000 personal loan:

Credit Score

The higher your credit score, the less you’ll pay in interest. If you don’t know your credit score, your credit card company or bank may give you a free update each month, so check with them. You can also get a free credit report from annualcreditreport.com.    If your credit score is low, there are lenders who will work with you, so shop around. Even filing for bankruptcy doesn’t rule out getting a personal loan. There are bankruptcy loans you can check into. It’s difficult to qualify for them and you’ll pay more, but it is possible to get a personal loan after filing for bankruptcy.   

Employment History

In order to qualify for a $10,000 personal loan, you need a strong employment history to show that you can cover the monthly loan payments as well as your living expenses. If you’re unemployed or have just started working, you may have trouble getting approved. Lenders like to see that you can hold a steady job. 

Debt-to-Income Ratio

Your debt-to-income ratio (DTI) compares your gross monthly income to your monthly debt payments — meaning anything you have borrowed money for and are paying back, such as credit cards and loans. Lenders look at the amount of monthly debt a borrower has before greenlighting a loan. The following debts are used to determine your DTI:
  • Credit card debt
  • Student loans
  • Auto loans
  • Personal loans
  • Mortgages
To calculate your DTI, divide your monthly debts by your gross monthly income (the money you make before taxes). Lenders prefer a DTI lower than 36%. Generally, the highest DTI you can have to be considered for a loan is 43%. However, even if your DTI is lower than 43% before you take out a personal loan of $10,000, if the payments on the new loan will put you over that threshold, the lender may not approve you for the total loan amount. 

Collateral

Collateral may make the difference between getting approved or denied for a $10,000 personal loan. An unsecured loan does not require collateral; a secured loan does. For that reason, unsecured and secured loans typically come with different interest rates (rates on unsecured loans tend to be higher).If your application for an unsecured loan is denied, you could try applying for a secured loan instead. Just know that you run the risk of losing your collateral if you default on payments.  

Top $10,000 Personal Loan Lenders

Our top $10,000 personal loan lenders offer low rates with long terms (up to at least five years). Each also offers rates at or below 10%. Ideally, you’ll want a credit score of 660 or higher to apply. But even if your credit score is good, it’s possible you may be approved.When comparing these lenders, be sure to study the origination and application fees to get a better understanding of the total cost of the loan. If you find that monthly payment is less than you thought it would be, you might want to consider applying for a $20,000 loan — especially  if $10,000 is the bare minimum of what you think you’ll need.  

Compare Personal Loan Rates

If you’re considering taking out a personal loan, Lantern by SoFi can help. Our online marketplace makes it convenient to easily and quickly compare personal loan rates from multiple lenders with just one simple application. And if you’re looking for a loan to cover business expenses, you can search specifically for business loans. By exploring options, you may find favorable business loan terms that fit your needs. Check your rate at Lantern today!
Photo credit: iStock/Paperkites
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About the Author

Lauren Ward

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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