Should You Take Out a $100,000 Personal Loan? What To Consider Before Borrowing a 6-Figure Sum
Written by
Adam Palasciano
Edited by
Jairo Rodriguez
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Americans are relying on personal loans more than ever. LendingTree reported that as of 2023, 23.2 million Americans owe a collective $241 billion in personal loans. This is up from the $117 billion owed in 2017. Like many Americans, you might find yourself in need of capital — perhaps a 6-figure sum.
Before you attempt borrowing $100,000 via a personal loan, it’s important to understand how you can qualify, as well as the steps and procedures to secure the loan.
How To Qualify for a $100,000 Personal Loan
Generally speaking, you’ll need to have an exemplary credit profile and ultimately pose a low risk to the lender. Qualified applicants should have a FICO score of at least 720 to qualify for a loan of this size. However, if your score is 750 or above, you’ll likely get offered a better interest rate. Stable employment and your income level are also taken into consideration in the loan qualification process.
Steps To Getting a 6-Figure Loan
Here are five steps to securing a 6 figure loan, according to Forbes:
- Check Your Credit Score: As mentioned, a credit score of at least 720 is advisable to be approved for a 6-figure personal loan. Be sure to monitor your credit score and activity closely in advance of applying for a loan of this size.
- Collect The Required Identification Documents: To save time when applying, you’ll need the following identity documents ready to present:
- Proof of Identity: This can include a driver’s license, passport, or birth certificate.
- Employer and Income Verification: This can include paystubs, tax returns, and W-2s.
- Proof of Address: This can be proven via a utility bill, proof of insurance, a lease or rental agreement, or a voter registration card.
- Compare Interest Rates and Lenders: Many financial institutions offer personal loans of up to $50,000, but not all lenders will offer $100,000 loans. You’ll need to find a lender that is likely to approve you based on your credit profile and that offers larger personal loans. Some lenders allow you to do a prequalification process, which will show you available loan terms and interest rates without a hard credit check that negatively impacts your credit score.
- Apply In-Person Or Online: After you’ve found a lender that offers larger loans, you might be able to apply online which is typically a streamlined process. However, more traditional brick-and-mortar banks may still require an in-person application at a branch location near you.
- Pay Back Your Loan: Now that you’ve successfully secured your loan, be sure to make on-time payments in full each month. Late or missed payments will not only adversely affect your credit score but also drive you further into debt.
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