You can easily find lenders who will be interested to offer you an unsecured personal loan with an amount of $100,000 for as long as you have the income and a good to excellent credit score. When you need that amount of money, it is doubly important for you to research and compare the right lender, loan term, and interest rate.
There are certain reasons that most lenders accept as reasonable when you apply for a loan. Most often these reasons also make the loan more worthwhile and beneficial for you. These reasons are the following: for consolidating huge loans, renovate homes, and grow or to start a business.
Most often lenders consider home improvement as a less risky reason to approve a loan compared to starting a business. There are many other uses for a large amount of personal loan, but you have to choose a lender that specializes in your particular loan purpose.
When you are searching for a loan, there are minute yet important elements that you might miss out on such as the fine print, additional costs, other borrowing options, and longer loan terms.
The fine print has the terms and conditions of the loan agreement. You have to ask questions when there’s something that you don’t find agreeable. These are some elements that you may need to ask: privacy policies, prepayment options, penalties, and your rights as a borrower.
You may also need to check on the additional costs or fees and charges aside from the interest. Some lenders charge the loan origination costs which are often included in the APR or annual percentage rate. You also have to watch out for penalty fees for late payments. These fees may not be included in the APR and they could be hefty.
It can be tempting to choose a loan with a longer repayment term, but it will cost you more in the long run. That’s why you have to choose a loan with the shortest loan term that you find comfortable for you pay off.
Before you apply for a personal loan of any amount, it’s crucial for you to determine your eligibility. Lenders often consider the three Cs to determine borrower’s eligibility: character, capital, and capacity.
Character means creditworthiness. This will depend on your credit score and other details on your credit report such as open accounts and payment history.
Capital means your collateral which is required when you get a secured personal loan. Usually, the collateral is valued to make sure that the lender can recoup its losses once you miss any of your payments.
Capacity is your ability to repay the loan. For this factor, the lender will look into several personal aspects such as your current job and salary and your debt to income ratio to figure out if you have the ability to repay the loan and handle all other financial obligations.
There are three major sources of $100,000 personal loans: banks, credit unions, and online lenders.
These are excellent sources of $100,000 personal loans. You can check on a site like Credible which lists down different online lenders that offer large amounts of personal loans. LightStream, for instance, can provide up to $100,000 while Upgrade and Upstart can offer $50,000 each. When the loan amount you need is smaller, you can check Credible and compare prequalified personal loan rates. You can also check the loan terms. All you have to do is to fill out an online form and this will not have any bearing on your credit score.
Banks and Credit Unions
The majority of financial institutions are not capable of offering loans that amount to $100,000; but if you are looking for a bank that can offer this amount, you can go to Wells Fargo. The bank is known for offering larger amounts than most banks. Citizens and Citi will be able to offer up to $50,000 for a personal loan. The same amount goes for many credit unions.
There are many possible uses to a $100,000 personal loan. The money can be used for a home renovation project, to pay off medical bills especially the emergency ones, and even to enable debt consolidation. All these can be done without the need to put up your home as collateral. Before you make up your mind on a particular loan source, you need to review the following factors: interest rate, repayment terms, monthly payment, and total repayment amount.
This is one of the most significant factors to consider when looking for a lender. This is the amount of money you have to pay in interest charges per year. It is expressed in percentage. It’s not enough to choose the lender that can give you the lowest rate. However, how long it takes for you to pay off the loan has an impact on the interest payments. You will need another calculation to factor in which is the APR or the annual percentage rate.
Another factor that affects the loan’s repayment cost is the repayment term or the length of time that you must pay off the loan. The usual term for a personal loan is two to seven years. The longer it takes for you to complete the loan payment, the more interest charges you need to pay.
The rule of thumb when it comes to choosing a loan based on the monthly payment is to choose the loan with the shortest repayment term that has a monthly payment that is affordable to you.
When it comes to the relationship between the previously mentioned factors, you have to understand that the shorter the repayment term is, the lower is the interest rate offered by a majority of lenders. Another point to remember is that the longer the repayment term, the lower is your monthly payment.
Total Repayment Cost
When you find the right loan for your particular situation, it’s crucial to check the federal Truth in Lending Act (TILA) disclosure which will be provided to you by the lender. You have to look for the information on the finance charges and total payments.