Americans rely on personal loans more than ever. According to LendingTree, 23.2 million Americans will owe a total of $241 billion in personal loans by 2023. This is an increase from the $117 billion owed in 2017. Like many Americans, you may find yourself in need of capital—perhaps a six-figure sum.
Before attempting to borrow $100,000 through a personal loan, you should understand how to qualify as well as the steps and procedures for obtaining the loan.
How to Qualify for a $100,000 Personal Loan.
In general, you must have a strong credit history and pose a low risk to the lender. To qualify for this type of loan, applicants must have a FICO score of at least 720. However, if your credit score is 750 or higher, you will most likely be offered a better interest rate. Stable employment and income levels are also considered during the loan qualification process.
Steps for Getting a Six-Figure Loan
Forbes suggests five steps for getting a six-figure loan:
- Check Your Credit Score: As previously stated, a credit score of at least 720 is required to be approved for a six-figure personal loan. Make sure to closely monitor your credit score and activity before applying for a loan of this size.
- Collect the required identification documents. To save time when applying, have the following identification documents ready to present:
- A driver’s license, passport, or birth certificate can all serve as proof of identity.
- Employer and income verification may include pay stubs, tax returns, and W-2s.
- A utility bill, proof of insurance, a lease or rental agreement, or a voter registration card can serve as proof of address.
- Compare Interest Rates and Lenders: While many financial institutions provide personal loans up to $50,000, not all lenders offer $100,000 loans. You’ll need to find a lender who is likely to approve you based on your credit history and provides larger personal loans. Some lenders allow you to do a prequalification process, which shows you available loan terms and interest rates without requiring a hard credit check, which lowers your credit score.
- Apply in-person or online: Once you’ve found a lender who offers larger loans, you may be able to apply online, which is usually a simple process. However, more traditional brick-and-mortar banks may still require you to apply in person at a branch near you.
- Pay Back Your Loan: Now that you’ve secured your loan, make sure to make on-time and full payments every month. Late or missed payments will not only lower your credit score but will also push you deeper into debt.