You can use a $20,000 personal loan to cover almost any big expense, like a home improvement project, a wedding, or a medical bill. But before borrowing such a large amount of money, you should spend some time determining if it’s the right decision for you.

Before you take out a $20,000 personal loan, be aware of common eligibility criteria, where to find one, and how to estimate your total borrowing costs.

Taking out such a large loan is a huge financial decision. If you take on more debt than you can afford to repay, there could be serious financial consequences, such as:

That said, here are some scenarios where taking out a $20,000 personal loan could improve your financial situation:

Eligibility requirements vary, but lenders typically consider these factors when applying for a personal loan:

You can get a loan for this amount from several financial institutions, such as banks, credit unions, or online lenders. Here is a list of lenders that offer $20,000 loans to help you start your search:

APR range Loan amount range Minimum credit score requirement
Before 9.95% to 35.99% $2,000 to $35,000 550
SoFi 6.99% to 22.28% (with automatic payment) $5,000 to $100,000 680
LightStream 3.99% to 19.99% (with automatic payment) $5,000 to $100,000 Not disclosed
TD Bank 5.99% to 19.99% $2,000 to $50,000 Not disclosed


Avant specializes in offering unsecured personal loans to borrowers who have fair and less than stellar credit scores. If you qualify, your funds can be deposited into your bank account the next business day. The downside, however, is that Avant’s advertised rates are high – they range from 9.99% to 35.99%.


SoFi offers a wide range of loan amounts, has competitive interest rates, and charges no fees. Its loan amounts range from $5,000 to $100,000; interest rates vary from 6.99% to 22.28% (with automatic payment). To qualify, you will need good credit and a decent income. The minimum credit score requirement is 680; the minimum income requirement is $45,000 per year.


LightStream offers a wide range of repayment terms and loan amounts ranging from $5,000 to $100,000 and offers a low minimum interest rate of 3.99% (with automatic payment) to qualified applicants. Repayment terms range from two to seven years for most loans; and two- to 20-month home improvement loans, pool loans, and solar loans. If you need a large loan for these purposes, you can benefit from lower monthly payments.

TD Bank

TD Bank offers personal loans ranging from $2,000 to $50,000 with no origination fees, prepayment penalties or application fees. It offers competitive interest rates ranging from 5.99% to 19.99%. If you qualify, you can get loan funds deposited into your account within one business day. However, a major downside is that the loans are only available in 15 states.

Long Term Costs of a $20,000 Personal Loan

Your overall borrowing costs depend on several factors, such as your interest rate, repayment term, and fees charged by the lender. Common personal loan fees include origination fees, prepayment penalties, and late payment fees.

Choosing a lender that has minimal or no fees can lower your costs. You can also lower your borrowing costs by choosing the shortest term available. The trade-off is that your monthly payments will be higher.

For example, let’s say you take out a $20,000 personal loan at 8% and a loan term of three years. In this case, your monthly payment would be $627 and your total cost of borrowing would be $22,562.18.

In contrast, your total costs would be higher for a $20,000 personal loan with the same interest rate but a loan term of five years. Although your monthly payments would be lower — $406, your total borrowing costs would be higher — $24,331.67.

To estimate your total borrowing costs, use Bankrate’s Personal Loan Calculator.

At the end of the line

Taking out a $20,000 personal loan is a major financial decision. Before moving forward, first determine if you really need to take out such a large loan. Next, estimate your borrowing costs to see how much you’ll spend over the life of the loan. If you determine this is the right decision, be sure to compare personal loan rates and terms from multiple lenders to get the best deal.