$5,000 Personal Loan: Pros, Cons, & Qualification | SoFi (2024)

By Bob Haegele ·September 29, 2022 · 8 minute read

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$5,000 Personal Loan: Pros, Cons, & Qualification | SoFi (1)

You might be wondering how easy it is to get approved for a $5,000 personal loan. In most cases, the process is straightforward and no collateral is required — though you might pay more in interest if your credit is poor. Overall, a $5,000 personal loan is a good way to access cash for unexpected bills and necessary expenses.

Learn more about the typical terms and requirements for a $5,000 personal loan.

Pros of a $5,000 Personal Loan

A personal loan is money that you borrow from a bank, credit union, or online lender that you pay back in regular installments with interest, usually over about two to seven years. Personal loans have several advantages over high-interest credit cards, making them a good option for a variety of borrowers.

Popular uses for personal loans include consolidating debt, covering medical bills, and home repairs or renovations.

Recommended: 11 Types of Personal Loans

Flexible Terms

With $5,000 personal loans, you can choose the repayment terms to fit your budget. For example, you can opt for a longer repayment term with a higher interest rate but a lower monthly payment. Or you can choose a shorter repayment term with a lower interest rate and a higher monthly payment.

No Collateral

Most personal loans are unsecured, meaning you aren’t required to provide collateral to be approved. That said, using collateral on a personal loan can increase your approval odds, especially if your credit is poor. Doing so could result in a larger loan amount, lower interest rate, and better terms.

Fixed Payments

The interest rate on a $5,000 personal loan is usually fixed, meaning your payments will stay the same for the life of the loan. Fixed payments are typically easier to budget for.

Cons of a $5,000 Personal Loan

Small personal loans of $5,000 or so have disadvantages that should be considered before you apply.


You’ll be going into debt when you take out a $5,000 loan, which is the biggest downside. If you struggle to repay the loan, you can end up in a worse financial position than before you took it on.

Origination Fees

Personal loans can have many fees, including origination fees. This fee is separate from the interest the loan charges and has no direct benefit to you as the borrower.

Some origination fees can be high, up to 15% of the loan principal. Even just a 5% fee on a $5,000 loan is $250 — just to receive the money. Fortunately, there are ways to avoid loan origination fees.

Interest Rates

While personal loan interest rates are usually lower than credit cards’, they can cost you hundreds (or even thousands) over the life of the loan. A personal loan calculator can help you figure out the total interest you’ll pay.

Personal Loan ProsCons
Flexible terms: Choose the repayment terms that suit you.Debt: Personal loans increase your debt and the risks that come with it.
No collateral: Most personal loans are unsecured.Origination fees: Personal loans often have fees for borrowing money.”
Fixed payments: Payments stay the same for the life of the loanInterest: You’ll be charged interest, which can cost hundreds or thousands of dollars.

Requirements for a $5,000 Personal Loan

Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.

Recommended: The Credit Score Required To Get a Personal Loan

$5,000 Personal Loan Terms

Repayment terms for a $5,000 personal loan are usually in the range of two to seven years. The length of the repayment term will play a role in determining the monthly payment amount and the interest rate.

Your credit score will also affect the interest rate. For example, the average interest rate for personal loans is 6.59% for those with Excellent credit. However, if you have Fair credit, the average jumps to 15.91%.

Payment on a $5,000 Personal Loan

The payment on a $5,000 personal loan depends in large part on the length of the loan term. For example, SoFi’s personal loan calculator estimates that the monthly payment for a two-year $5,000 personal loan ranges from $224 to $252. A $224 monthly payment over two years results in your paying $5,376 total: the $5,000 principal plus $376 in interest.

Increase the loan term to seven years, and you have a much lower monthly payment of $89 to $106. However, $89 paid over 84 months comes to $7,476. That’s a whopping $2,476 in interest for the same $5,000 principal.

The higher interest paid is due to both the longer repayment term and the higher rate that longer repayment terms usually come with.

Top $5,000 Personal Loan Lenders

There are many online lenders that offer $5,000 personal loans. Personal loan amounts can range from $1,000 up to $100,000. However, the requirements will be different for larger loan amounts. For instance, the credit score required for a $10,000 personal loan is 640, compared to 580 for a $5,000 loan. For a $50,000 personal loan, the credit score requirement jumps to 660.

Here are seven of the top lenders we find by searching online, along with their terms for a $5,000 loan:

1. LightStream

Lightstream is a division of Truist bank and offers some of the best APRs for $5,000 personal loans. APRs can be as low as 3.99% — the lowest on this list. While the exact APR will vary with your credit, Lightstream has some of the lowest fees overall, charging no fees to use its services. There is also a 0.50% discount for enrolling in autopay.

2. Discover

Discover offers personal loans with competitive rates and flexible terms. APRs on Discover personal loans range from 5.99% to 24.99%. Terms range from 36 to 84 months with no origination fees.

3. Marcus by Goldman Sachs

Marcus by Goldman Sachs offers personal loans of up to $40,000. APRs start at 6.99%, with repayment terms ranging from 36 months to 72 months. There are no origination fees, and there is a 0.25% discount for enrolling in autopay.

4. Best Egg

Best Egg offers personal loans of up to $50,000 and competitive interest rates. Loan terms are from 36 months to 60 months. However, Best Egg does charge an origination fee of at least 0.99% of the loan amount.

5. PersonalLoans.com

PersonalLoans.com does not lend money itself but instead connects you with lenders in its network or another third-party lender network. Personal loans from its lenders have competitive APRs, ranging from 5.99% to 35.99%. It has flexible repayment terms as brief as three months and up to 72 months. Most of the lenders in its network charge origination fees.

6. CashUSA

CashUSA offers personal loans of up to $10,000 with a competitive APR that starts at 5.99%. It has flexible payment terms which start at three months and can be as long as 72 months. Applying for a personal loan on CashUSA.com is simple, and you can have money as soon as the next day.

7. Happy Money

Happy Money offers the Payoff Loan, branded specifically as a personal loan meant for paying off credit card balances. Given that credit cards can have high APRs, Happy Money’s starting APR could be a good choice. Its term is from 24 to 60 months, and origination fees are included in the APR.

LenderAPRTermOrigination Fee
LightStream3.99% – 19.99%24 – 84 months$0
Discover5.99% – 24.99%36 – 84 months$0
Marcus by Goldman Sachs6.99% – 19.99%36 – 72 months$0
Best Egg5.99% – 35.99%36 months or 60 months0.99% – 5.99% of loan amount
PersonalLoans.com5.99% – 35.99%3 – 72 months1% – 5% of loan amount
CashUSA5.99% – 29.99%3 – 72 monthsVaries
Happy Money5.99% – 24.99%24 – 60 monthsIncluded in APR

The Takeaway

Many lenders offer $5,000 personal loans with competitive APRs and flexible terms. However, you are still charged interest and often additional fees, so you’ll want to shop around for the best deal you qualify for.

If you find yourself in need of quick cash, consider SoFi Personal Loans. SoFi has a competitive APR that starts at 6.99% for loans up to $100,000. There are no origination fees or hidden fees of any kind.

You can check your rate in 60 seconds without affecting your credit score, and get your loan funded as soon as the same day you’re approved.


What credit score do I need for a $5,000 personal loan?

In most cases, the credit score needed for a personal loan is at least 580, considered a Fair credit score. If your score is lower than that, your borrowing opportunities will be limited. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.

How much is the monthly payment for a $5,000 personal loan?

The amount you pay per month depends on the loan amount, the APR, and the length of the loan. You can opt for a longer repayment term with a higher interest rate but a lower monthly payment. Or you can choose a shorter repayment term with a lower interest rate and a higher monthly payment.

How can you get a $5,000 personal loan?

Online lenders tend to offer your best chance of approval, especially those that work with lender networks. This is because you can apply to more than one lender at a time.

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$5,000 Personal Loan: Pros, Cons, & Qualification | SoFi (2024)


How hard is it to get approved for a $5,000 loan? ›

Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.

What disqualifies you from getting a personal loan? ›

The reasons for loan denial can vary based on your unique situation. Common factors that prevent you from getting a personal loan can include a low credit score, insufficient credit history, a high debt-to-income (DTI) ratio or requesting too much money.

How much would a $5000 personal loan cost a month? ›

Advertising Disclosures
Loan AmountLoan Term (Years)Estimated Fixed Monthly Payment*
13 more rows

Do you need income to qualify for personal loan? ›

Not only is your income a crucial part of the qualification process on the lender's side, but it's also essential to your ability to repay your loan. Most lenders require proof of income to confirm your ability to meet repayment obligations.

What do I need for a 5k personal loan? ›

Most lenders will require you to have good credit, minimal debts and consistent income in order to qualify for a loan. Credit score and history: Lenders review your credit score and credit history to assess how likely you are to repay the loan. To qualify for a lender's lowest rates, you need good to excellent credit.

What do you need to get approved for a $5000 loan? ›

The qualifications for getting a $5,000 personal loan are much the same as any other sum. Consider standard requirements such as a good credit score and a low debt-to-income, or DTI, ratio.

What is the easiest loan to get approved for? ›

The easiest types of loans to get approved for don't require a credit check and include payday loans, car title loans and pawnshop loans — but they're also highly predatory due to outrageously high interest rates and fees.

Do personal loan companies check your bank account? ›

Yes, your bank account will most likely be scrutinized when you apply for a personal loan. Bank statements, including your income, expenses, and debt-to-income ratio, are typically reviewed by lenders to determine your creditworthiness.

What reason is most likely to get approved for a personal loan? ›

Medical emergencies, car repairs, or home repairs are examples of unexpected expenses that may require immediate financial assistance. Personal loans can provide a quick source of funds to cover these expenses, but it's essential to carefully review the terms and conditions of the loan.

Do you need collateral for a $5000 loan? ›

Eligibility Requirements for a $5,000 Personal Loan

Personal loan companies consider the following factors for approval: Collateral: Most personal loans are unsecured, meaning they don't require any collateral.

Can I get a $5000 personal loan with bad credit? ›

Yes, you can get a $5,000 loan with bad credit if you have enough income to afford the monthly payments, but the loan is likely to have a high interest rate. Several lenders offer $5,000 personal loans for people with credit scores under 640, and a few may not even require a credit check at all.

Is a 5000 dollar loan a lot? ›

A $5,000 loan can be hard to get if you don't have a lot of income or if your credit score is on the lower end. Those with an average income and a good credit score can look forward to a handful of loan options for $5,000.

What is a good annual income to get approved for a loan? ›

You need at least $10,500 in annual income to get a personal loan, in most cases. Minimum income requirements vary by lender, ranging from $10,500 to $100,000+, and a lender will request documents such as W-2 forms, bank statements, or pay stubs to verify that you have enough income or assets to afford the loan.

What determines if you get approved for a personal loan? ›

Lenders will look at factors like your credit score, income, debt-to-income (DTI) ratio, and collateral to determine your eligibility for a personal loan. Different lenders will have different requirements for approving personal loans. Some lenders may be willing to work with applicants who have lower credit scores.

What is required for a personal loan? ›

When applying for a personal loan, you must provide personal and financial information, including proof of identity, income and address. Lenders generally request information about your credit score, loan purpose and monthly expenses to determine your eligibility and loan terms.

Which loan company is easiest to get? ›

Easiest-to-get personal loans compared 2024
TitleAPRMin. credit score
Avant9.95% to 35.99%580
LendingClub9.57% to 35.99%600
OneMain18% to 35.99%Undisclosed
LendingPoint7.99% to 35.99%600
6 more rows
Mar 28, 2024

Can you get a $5,000 personal loan with no credit? ›

The best way to borrow $5,000 with no credit check is to apply for a personal loan from a lender that will not do a hard inquiry into your credit history, like Upstart or OneMain Financial. To determine if you can repay the loan, the lender will look into other things like your income and employment status.

What credit score do I need for a $3000 loan? ›

You will need a credit score of 580 or higher for a $3,000 personal loan. Most lenders that offer personal loans of $3,000 or more require a 580+ credit score for approval, along with enough income to afford the monthly payments.

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