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Consumers have multiple options for getting a $2,000 personal loan. Homeowners can take out a home equity loan, credit card account holders can take out a cash advance from their card’s line of credit, consumers can borrow money from friends or family members, and borrowers can also take out small personal loans from banks, credit unions, or nonbank financial institutions.A number of traditional lenders offer $2,000 personal loans to borrowers in need of quick money. Below we highlight the pros and cons of small personal loans and describe the application process for getting a $2,000 personal loan.
Pros and Cons of Small Personal LoansHere are the pros and cons of taking out a small personal loan:
Here are six traditional lenders that offer $2,000 loans, according to information posted on their websites as of January 2022:
|The application process for a small personal loan can be quick and simple||Small personal loans can carry high rates of interest|
|Some lenders can disburse the funds within 24 hours||Small personal loans can increase your overall debt burden|
|Borrowers with poor credit scores may qualify for a small personal loan||These loans may include high fees, including origination fees ranging from 1% to 8% of the loan amount and a prepayment penalty for borrowers who pay off the loan early|
|TD Bank||Citibank||Best Egg||LendingClub||Upstart||Avant|
|Minimum loan amount: $2,000||Minimum loan amount: $2,000||Minimum loan amount: $2,000||Minimum loan amount: $1,000||Minimum loan amount: $1,000||Minimum loan amount: $2,000|
|Repayment terms: 36 to 60 months||Repayment terms: 12 to 60 months||Repayment terms: 36 to 60 months||Repayment terms: Either 36 months or 60 months||Repayment terms: Either 36 months or 60 months||Repayment terms: 24 to 60 months|
Alternatives to Traditional LendersBorrowers may consider the following alternatives to traditional lenders:
Home Equity LoansHome equity loans can provide homeowners with a lump sum of money to use for personal expenses. These loans allow homeowners to borrow against the equity of their home, where the equity in your home is determined by subtracting the outstanding balance of any existing mortgage from the appraised value of your property.Some lenders may allow you to borrow up to 80% of the equity in your home. Borrowers are expected to repay the home equity loan over a set term, and the lender may foreclose on your home if you default on the loan.A home equity loan is secured by your home as collateral and essentially serves as a second mortgage on your property.
Credit CardsBorrowers may use credit cards to buy goods and services on credit directly, or borrowers may use credit cards to take out a cash advance through an ATM. Credit cards are a revolving line of credit allowing cardholders to make transactions up to the card’s credit limit.Some credit card companies may restrict the amount of your revolving line of credit that can be used for cash advances. Credit card companies may offer an interest-free grace period on new purchases and may begin charging interest on cash advances from the date of transaction.Some credit cards may offer a rewards program that provides cardholders with at least 1% cash back on all purchases. Cash advances can include high fees and interest and may not earn rewards under a credit card rewards program.
Friends and FamilyConsumers may borrow money from friends and family members as an alternative to going to a bank or non-bank financial institution for fast personal loans. A friend or family member may be willing to loan you a lump sum of money without charging you interest. For instance, if you're expecting, and need you help creating a nursery on a budget, a relative might lend you the money.Asking a friend or relative for financial assistance can help you meet planned or unplanned expenses, but failing to repay a family loan in full could strain your relationship with them.Some friends and family members may offer you quick financial aid upon request without any expectation of repayment, but there’s no guarantee they would forgive your debt without any friction or conflict.
$2,000 Personal Loan Application ProcessThe process of getting a $2,000 personal loan from a bank or non-bank financial institution begins with finding a lender of your choice. Many lenders offer their services online and may allow you to check your predetermined interest rate before submitting an application for a $2,000 personal loan.Checking your interest rate as a pre-qualified consumer may help you estimate what your monthly and total repayment obligations would be if you submit a loan application and get approved, but being pre-qualified or pre-approved for a loan does not guarantee you will get approved for the loan.The pre-qualification stage may allow you to get information about the terms and conditions of a potential $2,000 personal loan without impacting your credit score. Lenders can make that possible by conducting a soft pull inquiry into your credit report.Borrowers can shop around for a $2,000 personal loan and compare which lenders offer the best terms and conditions. After prequalifying for several offers and comparing rates of interest, borrowers may find themselves better positioned to make an informed decision on how to proceed.Borrowers with poor credit scores may apply for top personal loans with the assistance of a cosigner who will share the financial responsibility of repaying the loan. A cosigner may increase your odds of getting approved for a consumer lending product.When you are ready to submit an application with the lender of your choice, the lender at that point may conduct a hard pull inquiry to verify the accuracy of your application. As mentioned earlier, any hard pull inquiry into your credit report can cause your credit score to drop by several points.Some lenders may approve or deny your loan request within 24 hours of receiving your application. If approved, the lender may disburse your funds in one lump sum and within seven business days of approval. Some lenders move faster and may disburse the funds on the same day they approve the application.
The TakeawaySmall personal loans can provide borrowers with fast cash for meeting planned or unplanned expenses.Consumers have many options for borrowing money, but taking on new debt is no small matter. Some consumer lending products might work better for your budget than others, because the total cost of borrowing money from a financial institution is ultimately determined by the terms and conditions of the loan agreement.Lantern by SoFi can help you explore personal loan rates. Just provide basic information about yourself and the loan you need, and Lantern can guide you in the process to apply for a personal loan with the lender of your choice.
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About the Author
Sulaiman Abdur-RahmanSulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and currently serves as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.