How to Get a $3,000 Personal Loan

Regardless of how you'll use it, there's a smart way to get a $3,000 loan.

Start by researching online lenders, banks, and credit unions to find lenders that are most likely to approve you and give you the lowest rate. Then, compare $3,000 loans between lenders based on APRs, monthly payments, available discounts, and fees.  Which lender has the best $3,000 loan depends on your credit score, income, and employment. 

$3,000 loan lenders

Where can I get a $3,000 personal loan?

Most personal loans are available online via online lenders, banks (yours and others), and credit unions.

Online lenders

There are dozens of online lenders offering $3,000 loans, such as Prosper, Upstart, and Best Egg, that cater to a wide range of borrower profiles and needs.

Online lenders have built their platforms for ease and simplicity of use. Instead of visiting a physical branch location, you can complete the entire process from application to funding online, sometimes getting money as soon as the same day you apply.

"We believe lending can and should be a tool for happiness, which is why we have designed an application process and simple loan product with borrowers' best interests in mind," says Matt Tomko, the chief revenue officer at Happy Money, a financial technology company specializing in personal loans.

Banks

While some banks like Chase and Bank of America no longer make personal loans, Wells Fargo, U.S. Bank, T.D. Bank, Citi, Discover, and PNC do.

Note that banks may have certain stipulations. For example, you'll need to have had an open Wells Fargo account for at least 12 months to qualify for a Wells Fargo personal loan.

To stay up with the tech-driven upstarts, these and other banks typically offer online applications and same-day credit decisions for existing customers. If you're not a current customer, you may need to wait a few business days for your approved loan to fund.

Credit Unions

There are more than 4,000 federally insured credit unions with 139.3 million members. If you're one of them, you may wish to start your $3,000 personal loan journey here.

Credit union loans are known for their flexible terms, less stringent approval requirements, and interest rate caps, currently at 18%.

Credit unions, however, have membership restrictions. Typically, they limit membership to specific groups, such as military members, firefighters, teachers, or residents of particular regions. But anyone can join PenFed Credit Union, the nation's third-largest by asset size. It offers $3,000 personal loans with rates as low as 8.99% APR.

Approval estimates for $3,000 loans

We crunched a year's worth of data to find the average $3,000 loan rates that borrowers using the Credible marketplace received, and how likely they were to prequalify for a $3,000 loan. Not surprisingly, borrowers with excellent credit received the lowest rates and were the most likely to qualify.

Top loan purposes for $3,000 loans

Most people who got a $3,000 loan through Credible used it for debt consolidation or credit card refinancing. However, average rates were lowest for home improvement loans.

Interest rates for $3,000 loans by loan purpose and credit score

In addition to your credit score, lenders consider how you want to use the loan when determining what APR to offer. The graph below shows how APRs varied for different loan purposes for borrowers who used the Credible personal loan marketplace. For example, borrowers with poor credit received the lowest rates, on average, when they refinanced credit card debt.

How to compare $3,000 personal loans

While there are a number of features to compare between lenders and loans, cost is usually the most important. Be aware of the loan's monthly cost, overall cost, and any upfront costs, such as origination fees. Note that the repayment term you choose also impacts how much it costs to borrow $3,000. Here's how to compare.

Interest rates

While government policy and lenders' business and profit models are factors in determining your individual interest rate, you, the customer, also play a large role.

You should expect a competitive rate if you have a good credit score (a FICO score between 670 and 739) based on factors like your bill-paying history and credit utilization rate.

If you have a poor credit history (a FICO score below 580), expecting a rate more than double that of someone with excellent credit (a FICO score of 800 or higher) is not unreasonable.

If you have poor credit, you could pay more than twice the amount of interest over the life of your loan than someone with excellent credit.

Fees

Fees to look for include origination fees, late payment fees, returned payment fees, and so on. One lender may charge an origination fee; another may not. One lender may impose late fees; another may not. While you may be able to avoid late fees, origination fees (when charged) aren't optional and impact the overall cost of the loan.

That's why it's essential to compare each lender's annual percentage rate (APR), which accounts for upfront lender fees.

Repayment terms

Repayment terms on $3,000 loans could range from one year (or less) to five years. Some lenders offer longer repayment terms, but you may need to take out a larger loan amount to qualify.

The repayment term indicates not just how long you'll make payments on the loan, but how long you'll pay interest. In other words, you'll generally pay more interest on a longer-term loan. This is why it's best to get a loan with the shortest repayment term and monthly payment you can comfortably afford.

Monthly payment

Your monthly payment is determined by multiple factors, including your loan amount, interest rate, and loan term. By changing any of these three main inputs on a loan calculator, you will get a different monthly payment estimate. Your goal is to get one you can comfortably afford.

Total repayment costs

This gives you the big picture. Over time, interest adds up. If your loan is shorter, your monthly payments will be higher, but your total repayment costs will be less. Conversely, if you stretch your monthly payments over a longer period, your monthly payments will be less, but your total repayment costs will be more.

If you hate the idea of paying excessive interest over the life of your loan, shorten your loan term. If cash flow is your bigger concern, lengthen your term.

$3,000 loan cost comparison

This graph illustrates how different APRs can affect how much you'll pay over the life of the loan.

How to get a $3,000 loan

1. Evaluate your credit score and profile

• Obtain a free copy of all three credit reports (Experian, TransUnion, and Equifax).
• Clean up errors or discrepancies on the reports to boost your scores.
• Check your FCIO credit score for free via a site like Experian or through free tools provided by your bank.
• Take steps (pay off debts, reduce credit usage, etc.) to improve your score.

2. Research and compare lenders

• Research minimum income and credit score requirements between lenders to find those you may qualify with.
• Look for discounts you might be eligible for, such as discounts for autopay and direct pay to creditors (for debt and credit card consolidation).
• If time is a factor, find lenders that can fund your loan quickly, such as the same day you apply or the next business day.
• Find lenders that will approve your intended loan purpose.

3. Prequalify with multiple lenders

• To prequalify, provide a few pieces of information - such as the last four digits of your Social Security number, education level, annual income, and whether you rent or own - and the lender runs a soft credit check. In return, you get a quote that indicates the rate and loan amount you might qualify for.
• Prequalification quotes are not offers of credit. When you apply for a loan, most lenders conduct a hard credit check that could ding your credit score by a few points for up to a year.

4. Calculate estimated monthly payments

• Use an online personal loan calculator to plug in different repayment terms and loan amounts using the rates you've prequalified for.
• Compare numbers to find repayment term/APR/loan amount combinations that best fit your goals and budget.

5. Choose a lender and apply

• Review loan quotes to find ones with a payment you can afford and a lender you feel good about.
• Compare APRs to account for upfront fees, such as origination fees.
• If you choose a loan with an origination fee, know that the amount will likely be deducted from the amount you're borrowing.
• Confirm for yourself that your loan will help you accomplish your stated goal.
• Complete the lender's application form and provide required documentation.

6. Review terms, sign, and begin repayment

• Carefully read the contract's Truth-in-Lending (TIL) statement, showing the APR, finance charges, loan amount, monthly loan payment, total payments, penalties for late payments or early payoff, and all other applicable terms and disclosures.
• Sign the agreement and await funding.
• Begin repayment.

Personal loan alternatives

If you decide a personal loan isn't for you, consider these alternatives.

Cash advance

If you're among the 82% of Americans who have a credit card, you might be able to borrow against it in the form of a cash advance. The amount you can borrow typically is a percentage of your limit. Since your card issuer has already authorized your use, there should be little, if any, paperwork to fill out and no credit check. The downside of this alternative is interest begins accruing at once and cash advance fees may apply. Cash advances also do not earn credit cash rewards or other incentives.

Family loans

If you don't mind divulging your intentions or personal business to people close to you, your family and friends might be the perfect source for a $3,000 family loan. Typically, loans under $10,000 don't require the family lender to notify the Internal Revenue Service (IRS).

Nevertheless, to eliminate confusion and protect relationships, you and your family lender should at least document the loan amount, the interest rate, and the payback schedule. The interest rate should be equal to or greater than the IRS' Applicable Federal Rate.

To draw up a contract, you could download a legal agreement from providers like Lawdepot.com, legalcontracts.com, and eform.com, or consult services like Namma or National Family Mortgage to guide you through the process.

Pawnshop loans

People walk through the doors of the nation's more than 7,000 pawnshops daily, putting up their jewelry, musical instruments, electronics, firearms, and other possessions as collateral for short-term pawnshop loans.

Pawnshops can be a fast and convenient way to get cash without a credit check. Just keep in mind that seemingly modest, single-digit monthly interest rates, when computed annually, can quickly get pricey. A 4% monthly rate is at least a 48% (4% x 12) annual rate; a 5% monthly rate is at least a 60% (5% x 12) annual rate. Know the true cost of the convenience you're buying.

Personal line of credit

Without collateral, you could tap a personal line of credit up to your limit to pay expenses and maintain your cash flow. The interest rate on a personal line of credit is typically higher than a personal loan but lower than a credit card. However, unlike a credit card, interest accrues immediately, with no grace period.