How Much Personal Loan Can I Get?

2. Employment history

Steady employment can go a long way toward improving personal loan eligibility and the amount of money you can borrow. The longer you’ve been on the job (or in a similar job with another company), the more secure your position appears. While employment history has nothing to do with your credit score, it’s another tool the best personal loan lenders use to decide how likely you are to repay personal loan funds. 

3. Income and debt-to-income ratio

One of the most critical factors in determining how much you can borrow is how much you earn each month. Lenders want a sense of what your budget will look like once you add another monthly payment into the mix. One way a lender gauges this is to check your debt-to-income ratio (DTI). 

To calculate DTI, a lender adds together your fixed monthly payments. This includes mortgage (or rent), auto loans, credit cards, and other personal loans. Once they have a total, they divide that number by your gross monthly income (the amount you earn before taxes and other deductions). 

Here’s how one person might calculate their DTI:

Total monthly debt payments: $1,275
($850 mortgage + $325 auto loan + $100 credit card)

Total monthly income, pre-tax: $5,000

DTI: $1,275 (monthly payments) ÷ $5,000 (monthly income) = 0.25 = 25%

In this case, the DTI is 25%. It’s generally good to keep your DTI below 36%. While the maximum acceptable DTI varies by lender, it’s a smart move to keep yours as low as possible — especially if you want to qualify for a larger loan.

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4. Secured loan vs. unsecured loan

Most personal loans are unsecured loans. There’s no collateral with an unsecured loan, so if you stop making payments, the lender can’t take any of your possessions. (The lender can still sue you, though.) It can be hard for some people to qualify for a large unsecured loan.

You may be able to borrow more with a secured loan. With a secured loan, you’ll put up something valuable as collateral. The bank can take possession of this collateral and sell if you fail to pay back loan funds as agreed. You can usually borrow up to half of the value of the collateral. If you have a car worth $20,000, you can likely get a $10,000 loan by offering the car as collateral. Other examples of collateral for a secured loan include a car, savings account, retirement account, jewelry, or anything else of value you own.

How to qualify for a larger loan

If you qualify for a smaller personal loan than needed, it’s possible to increase the loan amount you’re eligible for. Here are some ideas on how to get a loan for a larger amount:

  • Shop multiple lenders
  • Opt for a longer repayment term
  • Enlist a cosigner
  • Offer collateral (apply to a secured loan)
  • Pay down existing debt
  • Improve your credit score
  • Increase your income

We’ll go into these in more depth below.

Shop multiple personal loan lenders

It’s always a good idea to consider multiple lenders, but it’s especially important if you want a large loan. Get pre-qualified with multiple lenders to find out how much money each lender can offer. Pre-qualification shouldn’t impact your credit score (lenders use what’s called a “soft credit check” to get an idea of your credit score), so this is a risk-free way to rate shop.

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Opt for a longer repayment term

If you need money soon, ask about extending the repayment period. Extending the repayment term will lead to a lower monthly payment (which means the lender may be willing to give you the loan you need). Be aware, though, that longer repayment terms mean paying more interest over time. 

Enlist a cosigner

If someone in your life has an established credit history and excellent credit score, consider asking them to be a cosigner on the loan. The lender will then decide eligibility based on both of your credit scores rather than yours alone. Remember: When someone is kind enough to cosign a loan for you, they put themselves at risk. If you miss a payment, they are on the hook for the money. Only ask someone to cosign a loan you’re sure you can pay back.

Offer collateral (apply to a secured loan)

As discussed above, if you’re applying for a loan without collateral (an unsecured loan), you might be able to increase your loan size by offering collateral (or applying to a secured loan). And if you’re already offering collateral, offering something of more value might boost the amount you’re approved for.

Pay down existing debt

If you’re not approved for the loan amount you require, ask the lender for an explanation. Your DTI may be too high. If so, work on paying off debt before reapplying for a personal loan. 

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Improve your credit score

Raising your credit score can help you get approved or a larger loan. One of the fastest ways to improve your credit score is to look for mistakes on your credit report. For example, a mistake might say you missed a payment you didn’t miss, or took out a large loan you never applied for. These can drag your score down. To get started, order a free copy of your credit report, look for any mistakes, and report those errors to the credit bureau.

For more information, head over to our guide: What credit score do I need for a personal loan?

Increase your income 

A new job or side hustle may make you eligible for a larger loan amount. It is likely to take months to see the fruits of a side gig — and months more to provide a lender with evidence of your increase in income. Still, if you need a loan for something big like debt consolidation or a home improvement project, it might be worth it to use the extra time to pad your checking account as you wait. 

Still have questions?

Here are some other questions we’ve answered:

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