How to get a $100,000 personal loan

A large loan limits your options, but you can qualify if you meet these requirements (iStock)

A personal loan can come in handy if you want to consolidate debt or make a big purchase without resorting to a high interest credit card. Unlike mortgages or car loans where the item being financed serves as collateral, it’s possible to find personal loans that are unsecured.

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Many financial institutions will offer personal loans that range from $1,000 to $50,000, but certain lenders will offer as much as $100,000 to qualified borrowers. If you’re interested, here’s what to know and expect.

How to apply for a personal loan

To qualify for a $100,000 personal loan, you’ll need to have good to excellent credit, a solid debt utilization ratio, no recent history of bankruptcy, and an above average income level that shows you can afford the monthly payment in addition to your regular expenses.

HOW TO FIND THE BEST PERSONAL LOAN FOR YOUR NEEDS

Before you apply, it helps to check your credit score to gauge your chances of approval. For a loan of this size, you’ll likely need to have a score of at least 670. Check the lender’s website for its requirements. In some cases, a $100,000 loan may require excellent credit.

Be sure to gather the necessary paperwork. You’ll need to provide your government-issued identification as well as proof of income and bank statements. You may also be asked to provide a reason for borrowing the money. This helps the lender assess your risk.

Personal loan mistakes to avoid

Before you sign on the dotted line, carefully read the conditions of the loan. Lenders rates and terms vary, so be sure to shop around and know what you’re getting into.

PROS AND CONS OF LONG-TERM PERSONAL LOANS

Ask about any costs or fees that will be assessed with the loan beyond its interest rate. Some lenders charge origination fees, which can range from 1 to 8 percent. Others may charge early repayment or late payment fees. You’ll want to know conditions upfront. You may find that another form of financing offers better terms, such as a home equity loan or line of credit.

And watch out for scams. Check the lender’s reputation as well as customer reviews by visiting the Consumer Financial Protection Bureau and Better Business Bureau websites.

Where to get a personal loan

When it comes to finding a lender that will offer an unsecured $100,000 personal loan, your options are limited. Here are some companies that do:

  • LightStream: APR: 4.44 percent to 16.49 percent
  • Wells Fargo: APR: 5.49 percent to 24.49 percent
  • SoFi: APR: 5.99 percent to 20.91 percent

What to do if you’re turned down for a personal loan

In the case that your application is denied the lender will likely offer a reason, and this information can be helpful for the future.

If your credit score wasn’t high enough, take steps to improve it by avoiding late payments. Also, check that your credit report doesn’t include incorrect information. According to the Federal Trade Commission, one in five people has an error on their credit report. If you find a mistake, disputing it and getting any misinformation removed can improve your credit score.

Lenders also like borrowers to have a debt utilization ratio less than 30 percent. This number is the percent of credit you are currently using compared to the total amount available. If you were denied a $100,000 loan, you may want to pay down debt to lower your debt utilization ratio.

Finally, you may decide to apply for a smaller loan. Your options for finding lenders will increase, and the requirements may not be as strict.

Large personal loans are possible if you are a qualified borrower. By knowing where to look and what to expect, you increase your chances of being approved and getting the funds you need to meet your financial goals.