What to know about getting a $70,000 personal loan

People take out personal loans for many reasons, from covering an unexpected medical expense or a big-ticket purchase, to consolidating higher-interest credit card debt. Personal loans provide fixed monthly payments and relatively low interest rates, and you can generally get one even with less-than-perfect credit.

The average personal loan balance is around $16,000, and Americans have nearly 43 million personal loan accounts, according to Experian. But what if you need a large personal loan — like $70,000?

Here’s how to get a $70,000 personal loan, and everything you need to know about eligibility requirements.

What to know about personal loans

Personal loans are installment loans that you can use for virtually any purpose. They’re generally unsecured — meaning you don’t have to put up collateral to get one. But some personal loans are secured with collateral.

Online lenders, banks, and credit unions are sources of personal loans. Some lenders charge fees to take out a personal loan, while others may charge a penalty if you pay off the loan early. If approved for a personal loan, you’ll receive your funds in a lump sum. You’ll repay the loan over a period of months — usually one to five years.

In many instances, once you submit your online application, you could get a decision and have the funds deposited into your bank account as early as the next business day.

You can compare rates from personal loan lenders who offer loans as high as $100,000 using Credible.

What can (and can’t) I use a personal loan for?

You can use a personal loan for many reasons, including …

• Making home improvements
• Paying off high-interest debt
• Consolidating debt
• Paying for unexpected medical costs
• Paying down a large tax bill

However, you should avoid taking a personal loan to …

• Pay off student loan debt — Your student loan interest rates are likely lower than a rate you’d get on a personal loan.
• Buy a car — An auto loan will likely have a better interest rate. Plus, personal loan lenders may specify that you can’t use their loans for vehicle purchases.
• Make investments — Borrowing to fund investments is never a good idea.

How can I qualify for a large loan?

Usually, you’ll need good to excellent credit — a score of 650 or higher — to qualify for a $70,000 personal loan, and to get the lowest rates available. You may qualify with less-than-stellar credit, but in this instance, you may need collateral. To better your chances of getting a $70,000 loan, take these steps:

• Pay down other debt if you can. Lenders will check your credit and look at factors like your outstanding debts and repayment history. They use this information to assess the risk of lending to you. Paying down your current debt will lower your credit utilization ratio and may help you qualify for your loan without offering collateral.
• Work on improving your credit. Your credit score is an important factor in the approval process. It also determines the APR and terms of your loan. Most larger loans require good to excellent credit. Factors that can affect your credit score include your credit history, age and mix of credit accounts, new credit applications, your credit utilization ratio, and total debt. Also, be sure to pay your credit card, car, mortgage, and all other bills on time.
• Improve your debt-to-income ratio. Lenders look at your debt-to-income ratio (DTI) to decide if you can afford to take on more debt and make another monthly payment. To improve your DTI, don’t take on any new debt, pay down existing debt (if possible), and reduce your spending.
• Get a cosigner. If you’re worried your credit score will hold you back from qualifying for your $70,000 loan, you might consider using a qualified cosigner. But remember, if you miss payments or default on your loan, your cosigner is obligated to repay the loan.
• Offer collateral. Generally, personal loans are unsecured, meaning you need no collateral to qualify. However, if your credit score keeps you from qualifying and you have assets, you may consider a secured personal loan.