There are times in life when you just need a little extra cash, and a personal loan can fit the bill. Perhaps, you’ve sprung a leak in the home or need to consolidate mounting debt. Your child’s tuition assistance may not have come through yet, or perhaps you need an extra boost to get through a particularly expensive holiday season.
Whatever the reason, there are $ 50,0000 personal loan options that can work as the short-term loan you need to resolve your financial woes. First, however, you need to sort through the $ 50K loan options to find the best personal loans that offer not only a good rate, but also the right lender who will approve you for a loan.
That’s where we come in. With our SimpleScore methodology, which compares rates, loan amounts, fees, customer satisfaction and customer support, we make it easy to find the right match for the best $ 50,000 personal loan options.
The 6 best $ 20K personal loans of 2020
{ More: Secured Personal Loans vs. Unsecured Personal Loans ]
We found results in California.
Best $ 20K personal loans at a glance
| Lender | APR | Terms | Fees | SimpleScore |
| Marcus | 6.99%–19.99% | 3–6 years | None | 5/5 |
| Discover | 6.99%–24.99% | 3–7 years | $ 39 late fee | 4.4/5 |
| OneMain Financial | 18%–35.99% | 2–5 years | Origination and late fees apply | 3/5 |
| LendingClub | 10.68%–35.89% | 3–5 years | 1%–6% origination, $ 15 or 5% late fee | 3.2/5 |
| Best Egg | 5.99%–29.99% | 3–5 years | 1%–6% origination, $ 15 late fee | 3.75/5 |
| American Express | 5.91%–9.98% | 1–3 years | $ 39 late fee | 4.25/5 |
*Rates accurate as of January, 2021, and exclude autopay discounts.
Best for No Fees – Marcus by Goldman Sachs
Save your money for the good stuff, because Marcus doesn’t believe in fees.
Marcus is our pick for the best debt consolidation loan since you will have up to six years to repay your loan, much longer than most other lenders. As a division of Goldman Sachs, you have the extra resources and security of a global bank.
Marcus provides personal loans of up to $ 40,000 with attractive rates and no fees. Because you have so long to repay your loan, you also are more likely to enjoy lower monthly payments. Marcus will even let you choose your due date! However, you will definitely need a good credit score to qualify since Marcus doesn’t accept cosigners. When you have good credit, Marcus can be your best bet for a personal loan with lengthy repayment terms, no fees and low rates.
Best Long-Term Loan – Discover, Member FDIC
Not sure about your loan? Discover’s return policy lets you return it in full within 30 days without interest.
Discover gives the longest repayment terms on our list, making it the perfect fit when you need a long-term loan. Depending on your credit score, you could qualify with a loan that gives you a whopping seven years for repayment. There is also the option for Discover to pay off your creditors directly, helping you consolidate debt with the extended time and without origination fees.
However, if you take out your loan for debt consolidation, you will need to use at least 70% of the loan for that purpose. Discover also does not allow for personal loans to be used for payment toward college or for Discover credit card payments. Be sure to check out the online tools and resources, which include a free FICO credit scorecard to help you stay on track.
Best for Bad Credit – OneMain Financial
Beggars can’t be choosers at OneMain, because your approval will cost you in high fees and rates.
OneMain Financial has made a name for itself as one of the more forgiving lenders for those with bad credit, but you will pay for it in high fees. It has some of the highest fees for a personal loan, but that is because it is willing to work with lower credit scores than the usual provider. Many factors of your loan will depend on where you live because how much you can borrow and what you will pay in the origination fee is dependent on state.
In some cases, OneMain will even fund your loan same-day. To help you qualify, you have the option of both joint and secured loans.
Best for a Cosigner – LendingClub
With LendingClub, time isn’t on your side because loans take awhile to be dispersed.
LendingClub is cosigner-friendly, or you can apply using a joint application. There is a 15-day grace period if you run into hard times and need a few extra days to make your payment. There is a soft credit check in order to pre-qualify so you can find out your options without harming your score.
LendingClub offers starting rates lower than OneMain, another fair credit lender, but it can take awhile to receive your funds, with four-day processing compared to OneMain’s same-day service. Origination fees run from 2% to 6% but it’s a good choice if you can have a lower credit score with industry-average loan terms. If you use your loan for debt consolidation, LendingClub will also help you with direct payments.
Best for Debt Consolidation – Best Egg
To enjoy these rates, you’ll need to stand all by yourself because Best Egg doesn’t allow joint applications.
Known for excellent customer service, Best Egg has some of the lowest starting rates for your $ 20,000 personal loan. Lending terms are average, lasting up to five years, and you will also have to pay origination fees which can run up to six percent. Borrowers also have a minimum income requirement of $ 100,000 per year.
If you want to see your rate, Best Egg will let you check your personal loan options using a soft credit check that does not impact your credit score. It typically takes one to three business days to receive your funds, and there’s no prepayment penalty if you decide to pay your loan off early.
Best Short-Term Loan – American Express
If you can walk the gauntlet for approval, American Express rewards you with low rates.
American Express also offers impressive rates, but it’s really only a good fit for those who are looking to repay their loan within one to three years. It’s a big difference from the seven years that Discover offers. There are no fees, with the exception of a late or returned payment fee, which saves borrowers a ton of money from the origination fees alone. You also receive free access to your credit score, so you can ensure your credit score doesn’t suffer unnecessarily while you repay your loan.
Even with the shorter repayment term, American Express loans are competitive enough that they require a very good credit score to qualify. While loans are only available to current American Express cardholders, your loan cannot be used to pay off any of your AmEx credit card balances.
[ More: How to Refinance Your Personal Loan ]
What is a personal loan?
There are three places where you can get a personal loan: a bank, credit union or private lender.
There are usually few restrictions placed on personal loans, allowing you to use the money for just about anything. This includes such financial needs like consolidating and paying off debt, home renovations or a major family event, such as a wedding or a funeral.
Once approved, your personal loan is delivered to you in cash in a single lump sum. You then have several months or years to repay the loan with interest, in accordance with the terms of your loan agreement. To make it more affordable and easier to repay, you typically pay in monthly installments until the principal plus interest and fees are paid in full.
[ See: How Personal Loans Work ]
Where to get a $ 20,000 personal loan
There are three types of lenders for a $ 20,000 personal loan: online lenders, credit unions and banks. When you need a personal loan, you should first consider which type of lender is best for you.
Online lenders
Online lenders are great because they enable you to quickly and easily shop multiple vendors at a time. It is a more competitive marketplace, with applicants able to see multiple rates simultaneously in real-time.
To get started, you usually are required to fill out a brief form with your personal details. There is often a pre-qualification process but most online lenders use a soft credit check, meaning that it does not negatively impact your credit score. While you are able to receive instant and multiple loan offers, it may not be ideal if you have special circumstances that could impact your loan.
Credit Unions
Credit unions are known for their added flexibility and considerations for their borrowers. In order to qualify, you must first become a member. Requirements vary, but membership is often based on some common association, such as educators or members of the military and their families.
Credit unions are nonprofit institutions, and as such, they are better equipped to handle the unique financial needs of their membership. That includes special resources and tools to help those who have bad credit. It’s why they can manage to be more forgiving of negative financial history while offering reasonable loans at favorable – and exclusive – rates.
Banks
Banks are the more traditional funding source for a personal loan, including institutions like Discover and Wells Fargo. However, they typically require a higher level of credit than the other types of lenders and have more rigid requirements for income qualification.
However, if you are a member of the bank, your relationship could mean a higher likelihood of approval or even a better interest rate. For example, some banks might waive the origination fee for its members or offer financial resources, such as a free credit report or creditor payment assistance.
[Keep Reading: Documents Required for a Personal Loan]
Pros and cons of a personal loan
Pros
- One lump sum upfront
- Usually paid monthly
- Typically unsecured loans
Cons
- Pricier than secured loans
- Must have good credit
- Can have expensive fees
The cost to repay a $ 20K personal loan
To illustrate a real-life example, let’s say you are approved for a $ 20,000 loan with Discover at an APR of 9.5% with a term of six years. Assuming that you have a good credit score between 700 and 749 and make a total of $ 75,000 in annual income, your monthly payment would be $ 365. You would pay an estimated $ 6,315.55 in total interest over the life of the loan.
This does not include origination fees, which typically run anywhere from 1% to 10% of the cost of the loan, and other fees, like late fees, returned payments, application and processing fees. Prepayment penalties sometimes apply when you pay off your loan early, but not all lenders charge this fee. This is why it is so crucial to carefully vet your loan options and review the terms and conditions so you can be sure to fully understand what a personal loan will really cost you in the end.
[ More: Personal Loan vs. Credit Card: Which Is Better? ]
How long will it take to pay off a $ 20,000 personal loan?
Whenever you take out a loan, it’s typically cheaper to pay it off as soon as possible so you can save on accumulating interest. However, if you have a bad credit score, you may want to stick with the original length of the loan in order to establish a good payment history and improve your credit score.
Most personal loans allow for repayment terms of about two to five years, giving you plenty of time to pay back what you borrow and also cover the additional interest. However, terms can vary considerably so be sure to shop your options carefully and determine which loan terms best suit your budget and your needs.
Some lenders may also charge prepayment penalties, which is when you are charged a fee for paying your loan off before the end of your loan. This could cost you quite a bit in the end, so be sure to factor these fees into your total loan amount.
What to consider when comparing loans
There are some other factors you should consider before choosing a personal loan.
- Credit score requirements. Before applying for a loan, you should consider the eligibility requirements. Every lender has its own requirements for personal loans, which includes your credit score. The better your credit score, the better your odds are for approval.
- Fees. Each lender may also have different fees, with charges for things like late payments, returned checks or prepayment penalties. Origination fees are also charged by some lenders and can run anywhere from one to eight percent, depending on which loan you choose.
- APR range. Your APR rate will determine how much interest you pay in addition to your loan. Our picks for the best $ 20K loans run from under 6% to over 36% in APR of your total loan. The difference can cost you thousands of dollars.
- Funding process. You may not have a ton of time to wait for your personal loan when there is an emergency, so you should consider how long it will take to receive your funds. Some banks may take several days to distribute funds, while others may even offer same-day funding.
Personal loan FAQs
The credit score that you need for a personal loan depends on several factors, such as the lender you choose and how long you have to repay. Personal loans are usually unsecured, meaning they do not require collateral, so they can carry higher APRs than secured loans.
Even if you have bad credit, you may still be able to get a $ 20,000 loan because lenders also consider other factors, such as your income and the reason why you need the loan. However, you are likely to pay a higher interest rate than someone with good credit.
If you take out a $ 20,000 loan with a 12.5% interest rate, your monthly payment would be $ 450 with a loan term of five years. This assumes that you have fair credit (a score of 640–699) and make $ 50,000 a year.
Too long, didn’t read?
A personal loan may be the lifeline you need to get your finances back on track, but it is important to first fully consider your options before choosing a loan. Things like origination fees, late fees and prepayment penalties can have a significant impact on what you pay in the end, so be sure to boost your credit score as much as possible and choose the right lender for you before choosing a personal loan. Our picks for the best personal loans of 2020 are an excellent place to start.
We welcome your feedback on this article and would love to hear about your experience with the personal loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.
