Personal loans usually range in value from about $2,000 – $45,000. So, if you just need $2,000, while that’s on the lower end of what you could take out, a personal loan is still likely to be one of your best loan options due to their flexibility and relatively fast approval process.
We’ll go over the requirements for a $2,000 loan, explain what variables you’ll still need to consider as well as the next steps for applying.
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Requirements for a $2,000 Personal Loan
Regardless of how much money you’re looking to borrow, lenders will review the following requirements when applying for a personal loan.
Credit score
Your credit score is one of the most important factors when applying for a personal loan. Most lenders have hard thresholds that you need to hit to qualify for a personal loan.
Typically, your credit score needs to be in the mid-600s to qualify for an unsecured personal loan. The exact score you need will vary by lender.
Verifiable income
Lenders will also review your application to ensure that you have a stable income. Your income is important to them because it’s directly related to your ability to pay back the loan.
You can still qualify for a personal loan if you’re self-employed. You will likely just need to provide additional documentation to prove that your earnings are stable over time, such as invoices and bank statements.
Technically, it’s even possible to qualify for a personal loan without a job. Some lenders have minimum income requirements, but not all of them do. You’ll just likely be approved for less money, and your credit score and outstanding debts will weigh even more heavily in the decision.
Debt-to-income ratio
Your debt-to-income (DTI) ratio calculates your outstanding debts against your income. The lower your DTI ratio is, the better your chances of getting approved for a new loan which equates to taking on more debt.
It’s hard to say exactly what percentage you need to qualify for a loan because it depends on the lender you choose and their holistic assessment of your application.
If your DTI ratio is 50% or higher, you’ll generally have a hard time getting approved for a loan by a reputable lender. The lower you can get your DTI ratio, the better off you’ll be when applying for a loan.
Supporting documentation
Lenders can’t just take your word about your finances. They’ll need to see verification from official documentation. This will likely range from documentation to confirm your identity to sensitive financial documents like tax returns and bank statements.
Make sure to promptly provide your lender with what they ask for to avoid delays in processing your application. If you apply online, there should be a secure portal through which you can upload your sensitive documentation.
Loan Terms for $2,000 Personal Loans
Even if you know you want a $2,000 loan, there are still a lot of factors to consider when applying for a loan. Remember, you’re likely going to be repaying the loan for years – long after you’ve spent the money you borrowed. It’s absolutely worthwhile to do your due diligence.
Interest rate
The interest rate you qualify for will be based on the lender you choose and the strength of your application. You’ll pay interest as part of your monthly repayment. Generally, the longer the loan term, the more interest you’ll pay over the life of the loan.
Lender fees
Lenders charge different fee amounts for processing and issuing the loan. A useful metric is the annual percentage rate (APR) because it combines the lender fees with the interest rate so that you can see the true cost of what you’ll pay to borrow money. Make sure to compare the APRs of multiple lenders before committing to a personal loan.
Repayment timeline
Loan repayment terms typically range from about 1 – 5 years. It’s possible to get a long-term personal loan with a payment term longer than 5 years. The shorter the term, the higher your monthly payment will be, but the more you’ll save on interest over the life of the loan. Ask your lender for estimates with different term lengths to get a sense of what will work best for you.
Prepayment penalty
Some lenders will charge a prepayment penalty if you pay off the loan before the loan term is up. Make sure to be aware of this ahead of time so that you can plan accordingly, or try to find a lender that won’t charge a prepayment penalty.
Can You Get a $2,000 Personal Loan With Bad Credit?
Yes, it’s possible to get a personal loan with bad credit – including one for $2,000. “Bad” is a fairly broad term, so exactly how difficult it is to get a loan will depend on what your score is. Keep in mind that even if you qualify, you’ll be charged a higher interest rate than someone with strong credit. If possible, it may be worth holding off and working on improving your credit first.
If your credit score is too low to qualify for a loan, there are other options. You can consider applying with a co-signer, or you can apply for a secured personal loan.
How To Apply for a $2,000 Personal Loan
If you can qualify for a personal loan, here are the next steps in the process.
- Research lenders: Compile a list of lenders that you want to consider. Remember to consider online lenders as well so that you aren’t limited by your geographic location.
- Compare lenders: Once you have a short list, it’s time to roll up your sleeves and do your due diligence. It’s possible to get prequalified with multiple lenders for a personal loan. This can be a good way to make apples-to-apples comparisons when coming to a decision.
- Fill out a loan application: Once you pick your lender, fill out an application. This can usually be done online, although some lenders might require you to do so in person. The application is straightforward, and you can usually expect a decision within a few business days.
In all likelihood, you’ll spend longer choosing a lender than you’ll spend filling out the application for a personal loan. These loans are popular because they’re flexible and have fast approvals. Some lenders can even issue the funds to you the same day you apply if you’re approved.
Final Thoughts on $2,000 Personal Loans
Applying for a personal loan is a straightforward process once you’ve chosen a lender, but don’t rush the process. Take your time to understand the loan terms and to choose the best option for your situation. Remember, you’ll be paying back the loan long after you’ve spent the money.
Get Prequalified for Loans from $2,000 to $45,000
Rocket LoansSM offers personal loans from $2,000 – $45,000. From debt consolidation to unexpected expenses, we’ve got you covered.
Checking your options won’t affect your credit score.
- Lenders will review your credit score, income and debt-to-income ratio as part of the personal loan application process
- Besides the loan amount, other variables to consider when applying for a personal loan include the interest rate, lender fees, loan length and if there are prepayment penalties
- Next steps for getting a loan are researching and comparing lenders. Once you’ve done your due diligence, the application process is usually straightforward and relatively quick
