How To Get a $10,000 Personal Loan

Whether you're facing a financial emergency, covering a large expense, or consolidating debt, a $10,000 loan from a top lender such as LightStream or Best Egg could help. But you'll need to know where to look to find the best $10,000 loan for your credit profile and what to consider as you compare lenders.

Where to get a $10,000 personal loan

Online lenders

Online lenders often provide the fastest personal loans. In most cases, you can get a loan quote (prequalification) in minutes without hurting your credit score. Once you've compared quotes from different lenders, you can choose a loan that makes the most sense and complete a more in-depth application. (A full application often includes a hard credit check, which could temporarily lower your credit score.) Some online lenders can fund your loan within 24 hours of approving your application.

Banks

Banks usually offer personal loans through their websites or brick-and-mortar branches. The initial process of getting the loan is similar to online lenders: Most offer prequalification, but credit and income requirements might be stricter. However, bank loans might appeal to you if you prefer customized service and face-to-face customer support. Some bank loans can take a week or more to fund.

Credit unions

Credit unions typically take you through the same process you'd go through with an online lender or bank. However, small credit unions may not offer a prequalification option, and credit unions usually require you to be a member to get a personal loan. Like banks, it could take a week or more to get your funds. Credit unions are less likely to offer an app that you can use to manage your loan compared to online lenders and some big banks.

What to consider when comparing $10,000 loans

APR

Interest rates and APR (annual percentage rate) are two different things. Interest rates reflect only the interest your lender charges, while APR includes your interest rate and upfront fees like origination fees.

The APR you receive is based on several factors, including your credit history, loan amount, and repayment term. Generally speaking, you'll get a higher rate if you have a lower credit score, and vice versa. Additionally, lenders tend to charge a higher interest rate for longer repayment periods. For example, a lender may charge you 23% for a $10,000 loan repaid over three years but may bump the rate to 25% if you repay the loan over five years.

Fees

A common fee you'll see during your $10,000 personal loan search is an origination fee. It's a fee the lender charges to process and service your loan, and to offset the lender's risk, in some cases. Not all lenders charge an origination fee. Those that do may charge a flat fee or percentage of your loan amount, then subtract that amount from your total before giving you the money. So, if your $10,000 loan has a 5% origination fee, you'd receive $9,500.

Other charges you may see are late fees and ACH return or check refund fees. ACH refers to Automated Clearing House, a nationwide network that financial institutions use to make electronic transactions. Some lenders, like LightStream, charge no fees whatsoever.

Repayment terms

Your lender will likely give you multiple repayment lengths ("terms") to choose from during your application process. Repayment terms differ depending on several factors including your loan amount and loan purpose. A general rule of thumb is that the shorter your repayment term is, the lower your APR and the higher your monthly payment. With a longer repayment term, you generally have a higher APR and a lower monthly payment.

Monthly payment

A key part of your decision about a personal loan is how much you'll pay each month. As you look over your options for a personal loan, compare each lender's monthly payment and repayment term.

It may be worth getting a $10,000 personal loan with a slightly higher monthly payment in exchange for a shorter repayment term (as long as the monthly payment comfortably fits your budget).

Total repayment costs

A loan's total repayment cost is the sum of your loan amount, fees, and interest. Your loan's total repayment cost gives you a clear picture of what it costs to borrow $10,000. Also, comparing total repayment costs from different lenders helps you see which lender offers better overall value.

Loan purpose

During your application, your lender will ask why you need a loan. Common purposes you can choose from include debt consolidation, home improvements, medical bills, and moving expenses. Repayment terms and loan rates may be based, in part, on your intended loan purpose.

Lenders that offer $10,000 personal loans

Cost to repay a $10K loan

The following costs are based on average APRs for each credit tier below from Credible personal loans data.

Steps to getting a $10,000 loan

• Check your credit score: Knowing your credit score will help you determine which lenders you're most likely to qualify with - most lenders have minimum credit score requirements. Be sure to use a reputable source, like your bank or credit union to get your score.
• Check your credit reports: Make sure there are no errors or misinformation on your credit reports with Experian, Equifax, and TransUnion. These could bring your score down or cause delays with your application. AnnualCreditReport.com is a reputable source that offers free credit reports weekly.
• Determine how much you can comfortably afford: Use a personal loan calculator to get an idea of what you'll pay each month based on your credit score, varying repayment terms, and multiple interest rates. Make sure your monthly payment fits in your budget.
• Research and compare lenders: Lenders vary in their fees and the benefits they provide. For example, some lenders offer discounts for autopay and for sending loan funds directly to your creditors if you're getting a debt consolidation loan.
• Prequalify with multiple lenders: Multiple prequalifications can help you see which lender is most likely to approve your application at the lowest rate. Use a personal loan marketplace to prequalify with multiple lenders at once. Just know that loan quotes are not offers and your rate could be different once you apply.
• Gather documentation: Your lender may ask you to provide documents proving your identity, address, and income. Acceptable documents include a driver's license, utility bill, and pay stub.
• Review terms, sign, and begin repayment: If the lender approves your application, it will send you a contract to sign. Review the terms of the contract before signing. Be sure you know how much your monthly payment is and when your first payment is due.

Alternatives to a $10,000 loan

0% APR credit card

0% APR credit cards are a common alternative to personal loans. The cards offer no interest on purchases for a certain period, such as 12 or 18 months. Any purchases you make and then pay off during that time are interest-free. However, once the 0% period is over, you pay interest on your existing balance and any new purchases. And, in many cases, your interest rate will be higher than what you'd pay for a personal loan.

"With a personal loan, you get consistency: fixed payments, a set repayment timeline, and fewer curveballs," First Foundation Bank Chief Operating Officer Christopher M. Naghibi said. "That kind of predictability helps a lot of people stay on track. Honestly, there's real peace of mind in not having a looming deadline tied to a promo offer."

You'll typically need at least good credit to qualify for a 0% APR offer. But check your existing cards for 0% APR balance transfer offers if you want to refinance credit card debt.

Payment plan (for medical debt)

Medical debt is a common reason for getting a personal loan. If you're facing a big medical bill and don't want to take out a $10,000 loan to cover it, ask your medical provider about payment plans. You might be able to pay your balance over time through interest-free monthly payments to your provider or a medical credit card with deferred interest.

Use your home's equity

If you're a homeowner, lenders may be willing to give you a loan if you have at least 15% equity in your home. You could get a lower rate this way — via a home equity loan or home equity line of credit (HELOC) — and a longer repayment term. However, loans can take a month or more to close and your house will be used as collateral for the loan. This means you could lose your home if you can't make your payments.

Borrowing from family and friends

If you're fortunate enough to have access to $10,000 through family and friends, it could be the best option. However, borrowing $10,000 from loved ones can involve emotional and psychological complexities you wouldn't get if you borrowed from an online lender, said Steven M. Hughes, a financial therapist at behavioral sciences firm The Decision Lab.

"This may especially be true for individuals who are looked at as a financial success in their family and network. A borrower may also feel guilty having to ask for money because of past conversations and experiences (or lack of communication) around money."

If using a family loan, formalize it with a family loan agreement specific to your state. Also, be aware of IRS applicable federal rates (AFR) for family loans to avoid tax implications.