Guide to $50k Personal Loans

Lauren WardUpdated November 10, 2023

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If you need financing to cover a large expense or consolidate debt, taking out a $50,000 personal loan is an option you might want to explore. But there is some information you’ll want to be aware of beforehand, including the eligibility requirements for borrowing a large sum. Read on to learn everything you need to know about getting a $50,000 personal loan, including the pros and cons of personal loans, how to apply for a $50,000 personal loan, how to find the best option for your situation, and more.

What Is a Personal Loan?

A personal loan is money you borrow from a bank, credit union, or online lender and pay back in regular monthly installments with interest. The money from personal loans can be used for almost any purpose. The interest rate is typically fixed, which means your payments will be the same from month to month.A personal loan can help you with a major expense you might not be able to pay for otherwise. However, taking out a loan, especially a large amount like $50,000, can be a big responsibility. You will want to weigh your options carefully to make sure it’s the right choice for you.As you’re exploring personal loans, you can look into the many types of personal loans on the market. The kind you choose can affect your interest rate and loan terms, so it may be helpful to see what’s available.

Pros and Cons of $50,000 Personal Loans

There are pros and cons of personal loans every borrower should evaluate before applying. Here are some of the benefits and drawbacks of taking out a 50k personal loan:

Pros of a $50,000 Personal Loan	Cons of a $50,000 Personal Loan
• Could help you afford a major purchase or consolidate debt• Making the loan payments could help build your credit • Low rates compared to some other financial products• Once approved, borrowers should quickly receive the full loan amount in one lump sum	• May be difficult to qualify for• May come with fees• Will reduce the available cash you have each month • Will increase your debt-to-income ratio (the amount of debt you have vs. your income)

Considerations When Looking for $50,000 Personal Loans

As you think about taking out a large personal loan, there are many personal loan offers to explore. These are some of the factors to look into:

Type of Lender

Most borrowers go to a credit union, bank, or online lender for a $50,000 personal loan. The process for how to get large personal loans may be a little different for each lender.For example, credit unions typically require borrowers to first become members before they can take out a loan. Often, this means paying a one-time membership fee and depositing a small amount into a savings account. If you have an account with a bank, you may want to see what rates and terms they might offer you since you already have a relationship. Online lenders may be able to give you quick funding, and oftentimes the requirements aren’t as stringent.

Interest Rates

Personal loans typically have fixed interest rates, allowing your monthly payments to be consistent. Higher interest rates will add to the cost of the loan, so you’ll want to shop around for the lowest rate.

Fees

Fees vary by lender. Types of fees you will want to compare include:

Loan origination fees
Prepayment penalties
Late fees

The loan origination fee is important because it may affect the loan’s APR (annual percentage rate). It may be added to the loan’s balance instead of being paid upfront, which means you could end up paying interest on it. Alternatively, the origination fee may be deducted from the loan funds before you receive them, in which case you would receive slightly less money than you expected.

Total Repayment Cost

This is the total cost of the loan, including the principal plus interest and fees. The total repayment cost is the amount you will repay. Ask the lender or a loan officer what the total repayment cost is, and be sure to get this information in writing.

Monthly Payment Amount

A loan’s APR and loan term will affect how much you pay each month. For longer loan terms, you’ll pay less each month because the loan balance is spread out over a greater amount of time. However, you'll pay more in interest because the interest has more time to accrue. A shorter repayment term can lower the amount of interest you’ll pay, reducing the total cost of the loan. Your monthly payments will be higher, though.

What Are the Typical Requirements for a $50k Personal Loan?

Wondering how to qualify for a $50,000 personal loan? Your approval typically depends on the following criteria:

Credit Score

Your credit score is a number that sums up your credit history. Credit score requirements vary by lender. Generally, the higher your credit score, the lower the interest rate you may be able to qualify for. For $50,000 personal loans, lenders might be looking for applicants with a good to excellent credit score.

Credit History

Your credit history includes your track record with paying bills, how much credit you have and what kind, and how much debt you have. Lenders typically want to see that you aren’t overextended with credit or have too much debt. In other words, they want to see that you are responsible in the way you use credit.

Income

Your income helps determine how much you are qualified to borrow. It needs to be enough to cover all your monthly payments — including the cost of a large $50,000 loan. Lenders typically look at your gross (pre-tax) income.

Debt-to-Income Ratio

Your debt-to-income ratio (DTI) is a comparison of the amount of monthly debt you have to your monthly gross income. Lender requirements vary, but a DTI of 36% or lower is considered ideal. You can calculate your DTI by adding your monthly debt payments (mortgage or rent payments, auto loans, student loans, and minimum credit card payments) and dividing that amount by your gross monthly income. Then, multiply the resulting number by 100.

Collateral

It is possible to get an unsecured personal loan that does not require collateral, but with a large $50,000 personal loan, a valuable asset may be needed in order for you to be approved. This is called a secured personal loan. Besides a house or a car, other assets a lender may approve include a boat, antiques, fine art, and jewelry.When you're using collateral to secure a loan, you may need an appraisal to confirm its value.

Down Payment

If collateral is needed and you don’t have any tangible assets besides cash, the lender may require you to deposit a certain amount of money into an escrow account as a down payment, where it will remain until the loan has matured.

Length of the Loan

Personal loans generally have repayment terms that are between one and five years. With a shorter term, you’ll pay less money for the loan overall, but you’ll pay more each month. A longer term will generally make your monthly payments smaller, but you’ll pay more in interest over the life of the loan.

Cosigner

If you have poor or no credit, lenders may require you to have a cosigner on the loan. The cosigner is typically someone with good credit. Should you be unable to make your payments, the cosigner becomes responsible and will be expected to make the payments.

$50,000 Personal Loans with Bad Credit

It’s possible to get a $50,000 personal loan with bad credit, but it’s more difficult. While there are lenders who work with borrowers with low credit scores, you’ll likely be charged more in interest. Having a creditworthy cosigner could help you secure a loan — and may help you get a better interest rate, as well.

How to Apply for a $50,000 Personal Loan

To apply for a personal loan, you’ll first need to decide if you want to apply with your current bank, a credit union, or an online lender. Take a look at the qualification requirements and make sure you meet them (or are close to meeting them) prior to applying. If your local bank requires a 700 credit score, for example, and yours is 600, you may want to inquire with a lender that accepts a lower score. You can also consider building your credit score prior to applying.Next, you’ll want to gather the necessary paperwork, which may include your driver’s license or Social Security number, proof of income, bank account balances, bank statements, your mortgage statement, and more. Typically, lenders will not ask for this information when prequalifying you, but they will eventually want to see these documents before final approval of the loan.It’s a good idea to prequalify with multiple lenders so you can find the best interest rate and terms for your situation. Since a prequalification does not impact your credit score, you can shop around without running the risk of lowering your score.Finally, once you’ve made sure you’ve met the requirements, gathered the necessary documents, and comparison shopped multiple lenders, you can apply for the loan. Online lenders tend to get back to you the quickest — oftentimes within one day of submitting your application. Banks and credit unions may take longer, but you may receive a better interest rate than with an online lender.

Questions to Ask Yourself Before Taking Out a Large Personal Loan

What Is This Loan For?

With a $50,000 loan, one of the questions to ask yourself is whether the debt you’re taking on is good debt. Good debt has the potential to increase your net worth in some way. This could include home renovations that increase the value of your house, for example. Also, consider what you are using the money for and whether a personal loan is the best choice. For instance, if you need funds for a business-related expense, you may want to explore business loans vs. personal loans to see which one makes more sense for your needs.And while you can use a personal loan for a car purchase, an auto loan may be more advantageous for this purchase because the interest rates may be lower.

How Much Can You Afford as a Monthly Payment?

Before taking out any loan, it’s vital to determine whether you can afford the monthly payments. Considering all of your other debts and expenses, can you comfortably make the monthly payment while also saving for important things like retirement or your child’s college education?

Is the Full Loan Amount Necessary?

Do you need the full $50,000? If you can get by with taking out a smaller loan amount, you might want to consider only borrowing what you need to avoid too much debt and paying more in interest. A $40,000 personal loan, for example, might be sufficient for your needs.

How Will This Affect Your Credit?

When it comes to your credit, one of the most important factors to consider is whether you will be able to comfortably make the monthly payments. Payment history accounts for 35% of your credit score. If you’re not confident you can consistently make the payments on time without stretching your finances thin, you may want to hold off on taking out a loan.

Alternatives to $50k Personal Loans

Although a large personal loan can be helpful when you’re faced with a major expense and need financing quickly, there are other options. These include:

Home equity line of credit (HELOC): A HELOC uses the equity you’ve built in your home as collateral for a revolving line of credit that you can repeatedly use and pay off. However, if you fail to make the payments, the lender can seize your home.
Home equity loan: With a home equity loan, you borrow against your home’s equity. It typically has a lower interest rate and a longer repayment term than a personal loan. But again, if you default on the loan, the lender can foreclose on your house.
Cash-out refinance: A cash-out refinance allows you to refinance your mortgage while borrowing money at the same time, based on the equity you have in your home. The cash-out refinance process entails borrowing a new mortgage for a larger amount than the existing mortgage; you then receive the difference in cash. You will pay closing costs, and you'll need to have your home appraised. If you don’t make payments, you are at risk of losing your home.

Compare Personal Loan Rates

Taking out a $50,000 personal loan could be helpful for paying a major expense or consolidating debt. While it may be difficult to qualify, you can use the money for virtually any purpose. Just be sure that you can afford to borrow such a large amount and that you can make the monthly payments. If you decide that a $50,000 personal loan makes sense for you, Lantern by SoFi can help you easily find an option that suits your needs. By filling out one simple form, you can conveniently compare offers from multiple lenders to find the best rates and terms for you.

Frequently Asked Questions

How much is the monthly payment on a $50,000 personal loan?

What are the income requirements on a $50,000 personal loan?

What credit score do you need to qualify for a $50,000 personal loan?

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About the Author

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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