Taking out a personal loan can be a helpful way to fund a variety of financial needs, like debt consolidation, medical expenses or even everyday expenses if you’ve lost your job. Online lenders, credit unions and traditional banks all offer a variety of $10,000 personal loan options. Many of them even make it easy to apply from the comfort of your own home, with no judgment if you’re still in your pajamas at noon.
We compared the best $10K personal loans, using our SimpleScore methodology to rank lenders based on rates, loan amounts, customer satisfaction, support and fees.
The 5 best $10K personal loans of 2020
Best $10K personal loans at a glance
|LightStream||2.99%–20.49% w/out Autopay||24–144 months||None||4.8/5|
|Upstart||8.41%–35.99%||3 or 5 years||0%–8% origination fee||3.4/5|
|Best Egg||5.99%–29.99%||3–5 years||0.99%–5.99% origination fee||3.75/5|
|NetCredit||34%–155%||12–60 months||5% origination fee||2.25/5|
|Citizens One||8.24%–21.13%||36–60 months||None||4.2/5|
*Rates accurate as of December, 2020, and exclude auto pay discounts
What is a personal loan?
A personal loan is a type of financing product that lets you borrow a lump sum of money. You then repay the lender with fixed payments for a set repayment term. In addition to paying back the amount you borrowed, you’re also charged interest on the loan. Some lenders include other fees as well, such as an origination fee which is deducted from your loan funds before you receive them. Unlike credit cards, personal loans come with fixed interest rates so you have the same payment amount each month and know exactly when the loan will be paid in full.
[ Read: Personal Loans for Self-Employed ]
Where to get a $10,000 personal loan
There are several types of lenders to choose from, giving you more options to find the best personal loan.
Online lenders make it easy to explore and apply for 10k loan options from the comfort of your home. Different lenders focus on different types of borrowers so you may find more options suited for your credit profile, including bad credit personal loans. Applying typically only takes a few minutes and you can get a financing decision quickly as well. Many online lenders are also known for getting your funding within a day of approval. Just be sure to do a reputation check before applying. Also compare your loan terms carefully, particularly when it comes to rates and origination fees.
Credit unions are member-owned and not-for-profit, so you may be able to find lower interest rates and fees when looking for personal loans. Depending on the size of the credit union, the application process may not be as tech-savvy. But they often have in-house loan approvals, which means they may be more forgiving, especially if you already have a history of banking with them. Membership is also required in order to join a credit union and use their financial products. It’s usually pretty easy, like living or working in a certain geographic area or making a contribution to a designated charity. But you’ll have to join before you can find out your $10K loan options.
[ Next: Documents Required for a Personal Loan ]
Banks vary greatly in size and experience, so there’s no one-size-fits-all solution for personal loans. Larger banks are likelier to have a fast online application process, while smaller institutions may require you to apply in person. Traditionally, banks are known for slower approval and funding times, but that’s changing as more join the online lending sphere. You may need to look at a few different options to find a bank offering a personal loan that suits your needs.
Pros and cons of a personal loan
- Fixed payment schedule
- Use funds for almost anything
- Get funded fast
- Interest rates may be high
- Origination fee may apply
- Late fees may apply
The cost to repay a $10K personal loan
The best personal loans are the ones you can afford to pay without damaging other areas of your finances. The amount you’ll end up paying on a $10k personal loan depends on several factors, including your repayment period, fees and interest rate.
Let’s take a look at a few example scenarios to get an idea of what to expect in terms of total cost for a personal loan of this size.
Most lenders offer a term length ranging between two and five years, so for this example let’s assume a term of four years (or 48 months).
- A $10,000 personal loan with a 5% APR would have a monthly payment of $230. Over the course of four years, you would pay $1,054 in interest.
- A $10,000 personal loan with a 15% APR would have a monthly payment of $278. Your total interest paid over four years would jump to $3,359.
- A $10,000 personal loan with a 35% APR would have a monthly payment of $390. The total interest on this loan skyrockets to $8,706 over the four-year repayment term.
Also remember these figures don’t include the cost of origination fees, late payment penalties and other fees you may encounter from your lender. Weigh both the pros and cons of these costs before signing a loan agreement. It may not be worth the monthly payment and interest in some cases, while other situations, like a debt consolidation loan, it may make sense.
[ Read: How to Refinance Your Personal Loan ]
How long will it take to pay off a $10,000 personal loan?
Most lenders offer $10,000 personal loans with the option to repay over two to five years. The term you choose will likely have an impact on your interest rate. Typically, lenders offer a lower interest rate for shorter terms because they’ll get the money back more quickly. While this option helps you save the amount of money you pay in interest over the course of the loan, your monthly payments will be higher. It’s not because you’re paying more for the loan, you’re just spreading out the payments over a shorter period of time.
With a longer loan term, you’ll likely be charged a higher interest rate since it takes longer for the lender to get the balance paid back. You’ll pay more in interest over time, but the burden is spread out longer. That makes your monthly payments lower, even though it will take an extra year or two (or three) to pay off your loan.
It’s up to you to choose the better option for your unique situation. If you can comfortably handle the higher monthly payment, then a shorter term can save you cash in the long-term. But if you need the money for a financial emergency and need to keep your monthly budget as low as possible, you may benefit from a longer loan term.
[ More: How to Start Building an Emergency Fund ]
What to consider when comparing loans
- Application requirements: Lenders often advertise basic requirements such as credit and income. Also check to make sure the lender offers personal loans in your state.
- Fees: Look to see how much each lender charges. Remember you’ll only qualify for the lowest rates if you have a strong credit history. Also check origination fees and early payoff penalties. Any origination fee is deducted from your loan funds. So you’ll be paying off the full amount, but you’ll have a fraction deducted for lender administrative fees.
- Funding time: Every lender has their own timeline for funding. If you need cash quickly, you may focus on lenders that advertise fast approvals and quick funding times. Note that it may take longer for funds to appear in your account, depending on your individual bank.
[Read: How to Raise Your Credit Score]
We welcome your feedback on this article and would love to hear about your experience with the personal loans we recommend. Contact us at firstname.lastname@example.org with comments or questions.