How to Borrow a Lot of Money

Most personal loan lenders limit the amount you can borrow. It's common for lenders to offer loans up to $40,000 or $50,000, for example. While these loan limits are high enough for most people looking for financing, there may be times when you need to borrow a bigger amount.

So what should you do if you need to borrow a lot of money? First and foremost, you need to make sure you're a well-qualified borrower. You'll need a great credit score and proof you've got enough income.

You'll also need to explore different loan options for securing enough financing, including:

• Finding personal loan lenders that loan higher amounts
• Taking out multiple loans
• Taking out specific types of loans that allow you to borrow larger sums

How can you borrow a lot of money?

Your options for borrowing a lot of money vary depending on your current financial situation, the assets you own, and your qualifications. Some of the options available to you include the following.

A personal loan from a lender offering high-dollar loans

There are lenders out there that offer large personal loans. Some lenders will let you borrow up to $50,000, and a select few offer $100,000 or more. If you can find a high-dollar personal loan from a lender that will approve you, this can be the simplest way to borrow a lot of money.

Multiple loans

Getting multiple loans from different lenders is another option if you need to borrow a lot of money. Instead of getting one $80,000 loan, for example, you might get two $40,000 loans from different lenders.

There are a few downsides to this. First, it could be hard to qualify for the second loan. Lenders will look at your debt-to-income ratio, which is the percentage of your income that goes toward debt. Lenders typically want to see a debt-to-income ratio of 35% to 40% or less.

Getting a second personal loan could be especially difficult if you recently got approved for the first one. The second lender may be wary that you're getting in over your head if you borrowed another big sum of money recently.

Using this method also means you'll have multiple payments -- and lenders -- to deal with. This can make repayment more of a hassle.

Credit card with 0% intro period

If you need to borrow a lot of money and you're confident you can repay it within 12 to 21 months, consider a credit card with a 0% intro offer. Keep in mind, though, that taking on a credit card balance will increase your credit utilization ratio, which could lower your credit score.

Home equity loan

You may be able to qualify more easily for a larger loan that isn't a personal loan. If you're a homeowner with a lot of equity in your home, for example, you might be able to qualify for a large second mortgage or home equity loan. Or you might take on a cash-out refinance loan.

However, your ability to do this is restricted by the equity you have in your home.

Let's say you're allowed to borrow up to 80% of your home's equity. If your home is worth $300,000 and you owe $100,000 on your current mortgage, you have $200,000 in equity. You would be able to borrow $160,000, or 80% of your equity.

Can you qualify to borrow a lot of money?

How much personal loan you qualify for depends on a number of factors. When you borrow a large sum of money, you present a greater risk to the lender. After all, if you default on a $40,000 loan, the lender stands to lose less than if you default on a $100,000 loan. Because of the risk that high-dollar loans present, many lenders only give these loans to the most well-qualified borrowers. Research on personal loans show those with higher credit scores take out larger loans and have greater outstanding balances.

To borrow a lot of money, you'll need a very good credit score, generally defined as a FICO® score of 740 or higher. You'll also need a stable employment history and income that's high enough to make the payments.

Lenders also look at how much you make and other debts you owe. If your debt-to-income ratio is too high, lenders won't approve you.

If you cannot get approved for a large enough loan on your own, you may be able to increase your chances of getting financing by having a cosigner apply for funding with you. The cosigner's credit and income will also be considered because the cosigner shares legal responsibility. If they are well-qualified, it could improve your loan approval chances.

Final thoughts

Think carefully about whether borrowing such a substantial sum really is a good idea. After all, a larger loan means you'll have much larger monthly payments. And you'll pay a lot more in interest over the life of the loan.

Unless borrowing such a big amount is truly necessary -- and you're confident you can afford the payments on it without adversely affecting other financial goals -- you may wish to scale down your expectations and borrow less.

Still have questions?

Here are some other questions we've answered:

• What is the biggest personal loan you can get?
• How many personal loans can you have at once?
• What is a good credit score for a personal loan?