How To Get a $35,000 Personal Loan

A $35,000 loan could help you cover planned or unexpected expenses, pay for a home repair or renovation, or consolidate debt.

LightStream is a top lender for personal loans thanks to industry-leading interest rates, but you'll need a good-to-excellent credit score to qualify. If you're on the other end of the spectrum, you might get a $35,000 loan from Avant, which considers applicants with FICO credit scores as low as 550.

As you can see, finding the right loan involves more than looking for the lowest monthly payment. Learn how different types of lenders, like credit unions and online lenders, can make a difference, and what to consider when comparing personal loans for $35,000.

Where to get a $35,000 personal loan

You can apply for a $35,000 personal loan through a bank, credit union, or online lender. Here's how they compare.

Online lenders

Most — but not all — online lenders offer $35,000 personal loans. They usually have the quickest turnaround times for applications and funding compared to banks and credit unions, with some providing approval decisions within minutes. Some can even fund your loan on the same business day.

An online lender may also be the best choice if you don't have a relationship with a bank or credit union or have bad credit. Online lenders may give more weight to other factors, like employment and income, than to your credit score. However, you'll probably pay a higher interest rate than someone with a fair or better credit score.

If you want to apply with an online lender, be sure to do some research to find a reputable one. "Scour borrower forums for unfiltered experiences" from borrowers, suggested Ali Zane, a credit repair expert and the CEO of Imax Credit Repair. "They reveal hidden drawbacks you won't find on glossy websites."

Also, prequalify with multiple lenders through a personal loans marketplace like Credible. Prequalification allows you to compare estimated interest rates, terms, and monthly payments without affecting your credit score.

Banks

Many banks offer $35,000 personal loans. A bank you currently use for a checking account, home loan, or another financial product could be an easy place to start. Your bank may offer better interest rates or loan terms for linking autopay from your checking account.

But some large banks, like Chase and Bank of America, do not offer personal loans. And the credit and income requirements could be higher at a bank compared to an online lender or credit union.

Credit unions

Because credit unions are member-owned and don't have shareholders like banks, they can pass savings along to their members.

In other words, you could get a better interest rate. According to the National Credit Union Administration, the average interest rate for a 36-month personal loan was 10.89% through a credit union, compared to 11.94% through a bank.

What to consider when comparing $35,000 loans

Take some time to compare $35,000 loans before applying. Here's what to consider.

1. Interest rates

A personal loan's interest rate determines how much interest you'll pay, but it doesn't present the entire picture. The annual percentage rate, or APR, includes the interest rate and other borrowing costs, like upfront fees. Comparing APRs can give you a better idea of your loan's overall costs than the interest rate alone.

Generally, the better your credit score and history, the lower your rate. Choosing a short repayment term, like two or three years, can also reduce your interest rate.

Adding a well-qualified cosigner or a co-borrower to your loan application could help you access a lower interest rate while increasing your chances of approval. Be careful going this route, though — your loan also appears on your cosigner's credit report and the cosigner shares responsibility for repayment and will be on the hook if you default.

"Check with your lender for cosigner release conditions," suggested Steven Kibbel, a certified financial planner and chief editorial advisor at Gold IRA Companies. "Some lenders let you release the cosigner after a certain number of on-time payments, keeping the loan in your name."

Learn More: This Week's Personal Loan Interest Rates

2. Fees

Fees can increase the amount you pay for your loan. Some lenders, like LightStream, don't charge any fees for loans. Others may charge the following:

• Origination fees: An origination fee is an upfront fee — sometimes up to 12% — that you'll pay for the lender to underwrite your loan and reduce its risk. It's typically deducted from the amount of your loan. For example, a $35,000 loan with a 5% origination fee would reduce the amount you receive by $1,750, but you would still need to pay back the full $35,000 plus interest.
• Late fees: If you miss a loan payment, your lender may charge a late fee, usually 5% to 10% of the unpaid amount. Some lenders charge a flat fee instead.
• Prepayment penalties: While not common for personal loans, some lenders could charge a fee if you pay off your loan early. A prepayment penalty could be a percentage of the principal that you paid off early or a flat fee.

Read the loan agreement terms carefully before signing to understand all fees your lender may charge.

3. Repayment terms

Lenders often offer two to seven-year repayment terms for personal loans, including $35,000 loans. Your monthly payment can be lower with a longer repayment period, but you'll also pay more in interest. To pay less over the life of your loan, choose the shortest repayment period with a monthly payment you can reasonably afford.

4. Monthly payment

A personal loan is typically repaid in monthly installments. Personal loans are usually fixed-rate loans, meaning your interest rate remains the same. This also means that your payment stays the same each month.

Comparing monthly payments between loans can help you find one that makes sense for your specific budget. But avoid focusing only on the payment amount. Also consider the proportion of your discretionary income it consumes.

"It's where many borrowers get trapped," said Zane. "Keeping your monthly loan payment below 10% of your take-home pay" can be "a good benchmark," provided you're not living paycheck to paycheck.

5. Total repayment costs

When you borrow $35,000, you'll pay more than $35,000 to your lender by the time you pay off the loan. This is true even if a lender doesn't charge any origination or prepayment fees and you pay the loan on time each month. Interest accrues over the loan's term, and you could pay thousands of dollars more than your original loan, even with a good interest rate.

Use a personal loan calculator to estimate how much you'll pay for your loan in total. This can help you compare repayment terms and APRs offered by different lenders.

6. Loan purpose

Lenders usually have restrictions on what you can use your loan for. For instance, lenders don't let you use a personal loan for college tuition or gambling. Others may limit uses to debt consolidation and home improvements only, for example.

Research lenders before applying to make sure they allow personal loans for your intended use. Check support pages on lender websites and personal loans marketplaces, or contact customer service for this information.

Cost to repay a $35K loan

The following table compares the hypothetical APR, monthly payment, total interest, and total payment for 3-year and 5-year $35,000 loans based on various credit scores.

For a 3-year $35,000 loan:

For a 5-year $35,000 loan:

Steps to getting a $35,000 loan

Follow these steps to apply for a $35,000 loan:

1. Check your credit: Review your credit score before you apply so you can get an idea of your loan eligibility and what lenders you could qualify with. You can check your credit report for free at FreeCreditReport.com, or your bank or credit card company might offer free monthly credit score updates.
2. Research and compare lenders: Look for a mix of online lenders, banks, and credit unions to compare interest rates, fees, and funding times.
3. Prequalify: Compare potential rates and repayment terms you might get approved for by prequalifying with multiple lenders. Prequalification with a soft credit inquiry is free and doesn't affect your credit.
4. Compare lenders, monthly payments, and rates: The best loan for you could be the lowest-cost loan with a monthly payment you can afford. Or it could be with a lender that has excellent customer service but a slightly higher rate. Compare lenders based on what's most important to you.
5. Gather documentation: Have your identification, pay stubs or tax returns, and proof of address ready to apply for a $35,000 loan.
6. Select a lender and apply: Choose the lender offering the most suitable loan option for your financial situation and submit an application. The formal application process can reduce your credit score by a few points temporarily due to a hard credit check.
7. Review terms and sign: Check the terms of your loan and sign the agreement. Your lender will fund your loan according to its timeline, but usually within a few days.

Alternatives to a $35,000 loan

A $35,000 loan may not work for you if you don't have a stable income or a solid credit history. These other options could help you get the money you need:

• Peer-to-peer (P2P) loan: Individuals can invest in peer-to-peer loans via P2P platforms, like Prosper. Qualifying for a peer-to-peer loan may be easier than getting a traditional loan if you have bad credit or a limited credit history.
• Personal line of credit: A personal line of credit gives you a set amount of money to borrow against when you need it, similar to a credit card. This could be a good option if you think you'll need to continue borrowing money over time for things like medical bills or home improvements. You can usually access your credit line by writing a check from your account or completing an electronic bank transfer.
• 401(k) loan: Some 401(k) accounts allow you to borrow money from your retirement savings. These loans don't require credit checks like traditional loans. You can borrow up to $50,000 or 50% of your vested balance, whichever is less.
• Life insurance loan: Your insurer may let you borrow against a whole life insurance policy with cash value. "No credit check, reduced interest rates, and flexible payback terms are typical of this option," explained Kibbel. "Repay the loan quickly to prevent lowering the policy's death benefit." A life insurance loan, if mishandled, could potentially cause your policy to lapse and have significant tax consequences. It's best to review the implications and conditions thoroughly before borrowing this way.
• Home equity financing: If you own a home with equity, you can use a home equity loan or home equity line of credit (HELOC) instead of a traditional loan. Borrow a lump sum with a home equity loan or borrow against a HELOC over several years. Because your home is used as collateral for home equity financing, these options tend to come with lower interest rates than personal loans.
• Family loans: If you're able to borrow money from family, it could be a better arrangement, especially if you're struggling to qualify or qualify for an affordable rate. But it's important to put the agreement in writing and for the loan to have a fixed repayment schedule and an interest rate that's considered acceptable by the IRS.

Read more: Secured vs. Unsecured Personal Loans