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When times are tight and options seem limited, what sounds better than a 50K personal loan? After all, so many lenders put out flashy ads saying how easily you could qualify. It almost sounds too good to be true — and that just might be the case. Best case scenario: you get the loan. Worst case scenario: you take a small hit to your credit and waste your time chasing a mirage. To avoid getting caught off guard financially, it’s important to gather all relevant information before deciding whether or not to apply.

Can You Qualify For a $50,000 Personal Loan?

$50,000 is a large sum of money. Lenders are only able to offer loan services when they are able to turn a profit. In order to do that, they aim to lend to low-risk borrowers. That means you need to meet all the necessary criteria to qualify — difficult, but not impossible. You must have: 

  • A good credit score: Your personal credit score tells lenders about the likelihood that you’ll make your payments on time. This is why it’s important to know your own score. You can check it using a free service like CompareHub.
  • High income on a regular basis: Being able to prove that you have a steady, well-paying job will better your chances of getting a personal loan. It shows lenders that you are able to repay the amount. 
  • Low debt-to-income ratio: This refers to how much of your income goes toward paying any debt you might have. The lower this ratio, the more money you have to pay off the loan for which you are applying.

Even if you meet all the above requirements, your ability to qualify for the loan will still depend on the economic landscape. If lenders are guarding their interests more prudently, you may also need collateral. You can use the equity in your home or a vehicle for this purpose. The value of the collateral secures the loan, meaning if you default, it becomes the property of the lender and they can use it to recuperate their money. 

Can You Qualify For A 50k Personal Loan With Bad Credit?

Technically, yes, you can qualify with bad credit. However, there are some risks associated with this type of loan. For starters, it will come with a cost. Most lenders will increase their interest rates for borrowers who have bad credit. This means you may end up paying substantially more interest on the loan, just because your credit is less than perfect.

You may also be asked to provide a cosigner to sign the loan agreement with you. A cosigner needs to have better credit and take on the responsibility of making the loan payments if you can’t. If you’re unable to keep up with the loan payments, both of your credit scores could be negatively affected.

Watch out for these hidden fees in personal loan contracts.

How Do You Increase Your Odds Of Approval For A 50k Loan?

Make Your Payments – It’s no secret that the better your credit the greater your chances of approval. So before applying for a loan, try your best to make your payments on time and in full. Your payment history usually has the biggest impact on your credit score, so keeping up with your payments may boost it enough to help you qualify for the loan. Moreover, this will help decrease your overall debt, which will lower your debt-to-income ratio, which is another important factor lenders consider when approving applicants.

Lower Your Credit Utilization Ratio – Your credit utilization ratio can also have a big impact on your credit score. It typically accounts for 30% of your credit score and can negatively impact your credit if it’s too high. Generally, a credit utilization ratio of 30% and below is ideal when it comes to building good credit.

Increase Your Income – Your income may be the most important factor when evaluating your creditworthiness. Most lenders will deny you a loan if you don’t meet their minimum income threshold. Typically lenders will look at your income from the last 3 months, so by increasing your income (even if just temporarily) through odd jobs, you may be able to qualify for a higher amount. However, it’s important to remember that you shouldn’t borrow more than you can afford as it can cause financial problems down the road.

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Tips When Applying For A 50k Loan

After assessing the potential risks and rewards of applying, you may decide that it’s the right path for your financial landscape. If that’s the case, then there are some measures you can take to make the application process easier. 

  • Compare lenders: There’s plenty of fish in the sea, so don’t settle for the first lender you see. Consult a loan comparison platform to investigate different rates. It might take a bit of extra time, but finding competitive interest rates can result in significant savings. Also, consider the reputation of the lender themselves and judge whether you are comfortable dealing with them on something as high-stakes as a loan. 
  • Check eligibility: Before you submit applications, determine whether you actually qualify. Take a look at your credit score and consider your income. Lenders will state the criteria to get a loan, so before you invest your time, make sure that you are eligible for acceptance.
  • Monitor your credit: When you apply for a loan, they look at your credit. $50,000 is a large sum and requires more than a soft credit check. Every time someone looks into your credit profile, it lowers your score by a few points (although some borrowers may see a more significant drop). Only apply for loans you are able to qualify for and serious about using.
  • Remember fees: In order to recuperate their funds and actually turn a profit, they charge several fees. Not only are there late fees on default payments, but there are also penalties for prepayments. Origination fees are taken straight out of your loan proceeds, and there are others that can be written into the fine print on your agreement. Be sure to read it carefully and plan for any potential expenses. 

Applying For a 50K Loan FAQs

Can I get a 50k loan without a credit check?

Just about every lender requires a credit check in order to qualify for a loan of this size. While you may be able to find a lender that doesn’t look at your credit, the terms are likely to be undesirable. If the lender doesn’t care about your credit, it is likely that they plan to recoup their money elsewhere (in fees and high interest). 

Can I get a 50k loan from a bank with bad credit?

If you apply with subpar credit, you are not likely to qualify for a $50,000 loan. There are some personal loan lenders that do accept bad credit, but in most cases they require collateral. You are also likely to face a much higher interest rate than if your credit was better. Many of these loans have a lot of hidden fees, so be cautious with the underwriting. 

How much interest would I pay on a 50k loan with a 3-year term and an interest rate of 5%?

Assuming you make your loan payments on a monthly basis, you would pay $1,498.54 per installment. By the end of your loan term, you would pay approximately $2,488 in interest alone. There are various online loan calculators available to help you determine what you would pay based on the term and interest rate. 

Final Thoughts

Qualifying for a $50,000 personal loan is challenging if you have anything less than good credit and a very well-paying job. While there are many approaches to getting this type of loan, they often come with a higher price tag when you factor in interest and fees. Before you decide to apply, make sure you have a game plan for repayment. If possible, spend some time improving your credit and reducing your debt-to-income ratio. By working on your overall financial standing, you can get better loan terms and see substantial savings on loans over the long term.

Corrina Murdoch avatar on Loans Canada
Corrina Murdoch

Corrina Murdoch has been a dedicated freelance writer and editor for several years. With an academic background in the sciences and a penchant for mathematics, she seeks to provide readers with accurate, reliable information on important topics. Working as a print journalist for several years, Corrina expanded her reach into the digital sphere to help more people gain insight into the realm of finances. When she's not writing, you can find Corrina swimming and spending time with family.

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