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What's the Maximum You Can Borrow When You Get a Personal Loan?

by Christy Bieber | June 5, 2019

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

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Image source: Getty Images

Whenever you decide to borrow money, you should always opt to take out the smallest amount necessary. That’s because the more you borrow, the higher your payments and the more interest you will need to pay on your loan.

Still, there are times when you need to borrow a substantial amount. You may need a large loan, for example, if you want to consolidate lots of existing debt or if you hope to do a big home improvement project.

Because there could be times when you need to borrow a big sum of money, it’s a good idea to figure out what the maximum amount you can borrow is if you obtain a personal loan.

What’s the maximum you can borrow when you get a personal loan?

There are many different personal loan lenders out there, each of which set its own terms for interest rate, minimum loans, and maximum loans. If you want to borrow a large sum of money, it will be important for you to compare loan offers from banks, credit unions, and online lenders. By casting a wide net in your search for the right lender, you can hopefully find the financing you need.

As you shop around, you’ll discover a substantial amount of variation in terms of maximum loan amounts. Because there’s so much variation, you will need to do your research -- particularly if you hope to borrow a large sum. If you need $70,000 or $80,000 to consolidate your debt, do your home improvement project, or otherwise accomplish your objectives for getting the loan, choosing a lender that caps your funds at $40,000 isn’t going to work out very well for you.

The Ascent's picks of the best personal loans

The Ascent's picks of the best personal loans

Looking for a personal loan but don't know where to start? The Ascent's picks of the best personal loans help you demystify the offers out there so you can pick the best one for your needs.

See the picks

Lenders won’t always approve you for the maximum loan

While lenders all set maximum loan amounts, there is no guarantee that you will be allowed to borrow at the upper end of the lender’s loan limit. In fact, lenders will decide how much they’re willing to allow you to borrow based on your unique financial profile.

Typically lenders look at your credit score as one of the most important factors in deciding whether or not to allow you to borrow the maximum. Lenders also look at your monthly income and the amount of debt you already have. If you have tons of debt already, you’re likely to be capped at borrowing a lower amount. The same is true if your income isn’t very high.

If you have substantial monthly income, good credit, and minimal other debt, then you’ll likely be approved for the maximum loan amount you apply for.

Don’t borrow more than you can afford to pay back

It’s also important to consider what your monthly payments and total loan costs will be when you decide if you should borrow the maximum a lender allows. Obviously a larger loan is going to have bigger monthly payments -- and will also carry a higher total interest cost than if you borrowed a smaller sum.

Most lenders allow you to get pre-approved for a loan and will display your loan terms before you have a hard inquiry placed on your credit report and before you finalize the loan application process. You should be able to see what rate you’d get if you borrowed the maximum as well as how much you’d have to pay each month and what the total cost of borrowing would be.

Use this information to decide if the loan that you’re considering is really affordable. And remember, even if you can struggle to make the monthly payments for a large personal loan, that doesn’t mean borrowing a big amount is a good idea. You don’t want to compromise efforts to save for retirement by taking out a big loan and committing to a huge monthly payment -- unless you have to do so.

What happens if you can’t borrow as much as you need?

If you can’t borrow as much as you’d hoped to, you have a few different options.

The Ascent's picks for the best debt consolidation loans

Want to pay off debt faster? Check out our shortlist of the best personal loans for debt consolidation and cut your monthly payment with a lower rate.

Pay off debt faster

You could try another lender -- but make sure you don’t accept a loan with unfavorable terms just because the lender is willing to give you more money. You could also scale down your expectations and accept the lower amount if it’s possible to achieve at least some of your objectives. If you’re consolidating debt, for example, you could use the borrowed funds to pay off most if not all of your existing debts.

If you have a family member or friend who is willing, you could also see if you’d be approved for a larger amount of money if you had a cosigner. Or you could work on improving your credit, paying down other debt, or increasing income and then apply for a larger loan again in a few months.

If you’re able to become a more qualified borrower by improving your financial situation, the lender you were working with is more likely to be willing to loan you a larger sum in the future since you won’t be seen as presenting as much of a risk.

Shopping around will help you find the loan that’s right for you

Now that you know the maximum personal loan amount will vary by lender, the best course of action is to shop around to find a lender that will lend you the money you need -- at an affordable rate. Just remember to ensure you can make your payments and that the total cost of the loan is reasonable before you make the commitment to go forward with taking out a personal loan.

Our Picks of the Best Personal Loans for 2021

We've vetted the market to bring you our shortlist of the best personal loan providers. Whether you're looking to pay off debt faster by slashing your interest rate or needing some extra money to tackle a big purchase, these best-in-class picks can help you reach your financial goals. Click here to get the full rundown on our top picks.

About the Author

Christy Bieber
Christy Bieber icon-button-linkedin-2x

Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

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