Borrowing a $2,000 personal loan could help you out of a tough spot, whether you need to cover a medical bill, car repair or another expense. While some lenders require you to take out a larger loan amount, there are banks, credit unions and online lenders that offer $2,000 loans. You might even be able to get funding in as little as one business day.
Follow these five steps to get a $2,000 loan.
1. Consider Qualification Requirements
Most personal loans are unsecured, so a lender bases its approval decision primarily on your credit and income. Here are some common qualification requirements for getting a $2,000 loan:
- Credit. A lender will look at your credit history and credit score when evaluating you for a loan. Borrowers with strong credit have a better chance of qualifying for more favorable terms. A good FICO score starts at 670, a very good score starts at 740 and an exceptional score starts at 800. You can check your credit score with the three major credit bureaus, use a credit monitoring service or go through your credit card provider. You can also review your credit report from AnnualCreditReport.com. If you spot any reporting errors, dispute them to have them removed.
- Income. You’ll need to meet a lender’s requirements for income to qualify for a $2,000 loan. A lender may require you to upload pay stubs when you apply to ensure you have the funds to pay back your loan.
- Debt-to-income (DTI) ratio. Your DTI ratio compares your monthly debt payments with your monthly income. It’s another indication of your ability to repay a loan. If your DTI is too high, a lender might reject your application for a loan. Lenders typically prefer a DTI of 35% or less.
- Co-applicant. While a co-applicant is not required to borrow a $2,000 loan, some lenders let you add one to your application if you can’t meet credit and income requirements on your own.
- Collateral. Most personal loans are unsecured, meaning they don’t require collateral. However, you can find secured loans, particularly if you fall short of a lender’s credit and income criteria. Secured loans are backed by collateral, such as a car title or bank account. However, you could lose your collateral if you fall behind on payments.
2. Prequalify With Multiple Lenders
Although a $2,000 loan is a relatively small sum, it’s still worth shopping around to find the best deal. Many online lenders let you prequalify for a loan, meaning you can check your rates without impacting your credit score.
All you need to do is provide some basic personal information and the lender will show you loan offers. These offers are not locked in until you submit a full application, but they can give you a sense of your rates.
3. Compare Your Offers
Compare offers from a variety of lenders to find one with the lowest interest rate and fees. Here are some factors to consider as you compare $2,000 loans:
- Annual percentage rate (APR). Your loan’s APR measures both the interest rate and fees, allowing you to compare loans on an apples-to-apples basis. The loan with the lowest APR should be the most affordable one.
- Repayment terms. Consider how many months or years you’ll have to pay back the loan. Since your loan amount is on the small end, your repayment terms might be shorter than they would be for a larger sum.
- Monthly payments. Review what your monthly payments will be on each loan offer to ensure they fit your budget.
- Funding time. Find out how long it will take to receive the funds, especially if you have an immediate need for the loan.
- Customer service and reviews. Check out reviews of the lender to see what other borrowers have to say about the loan process and customer service. Make sure the lender offers customer support via phone, email and/or web chat in case you have questions or run into any issues.
4. Complete and Submit Your Application
Once you’ve found a loan offer you like, complete and submit a full application. This application will be more extensive than the prequalification form.
You’ll provide your personal details, as well as upload any required documents. Examples of documents include pay stubs, W-2s and bank statements, though the requirements will vary by lender.
Many lenders let you complete the application online, though some offer the option of applying over the phone or in person.
5. Manage and Repay Your Loan
After you submit your application, the lender will review your information and run a hard credit inquiry to check your credit. This hard credit check could temporarily ding your credit score by a few points.
Assuming the lender approves the loan, you’ll receive the funds, minus any origination fee the lender charges. You’ll also start paying back the loan on the agreed-upon repayment term. Consider setting up automatic payments to ensure you don’t miss any.
How to Get a $2,000 Loan With Bad Credit
Bad credit can limit your options for a $2,000 personal loan. Since most personal loans are unsecured, lenders rely on your credit and income to determine your risk as a borrower.
That said, it’s still worth shopping around to see if a lender is willing to work with you. Universal Credit, for instance, requires a minimum score of 560, while Upgrade and Avant require scores starting at 580.
You might also check your current bank or credit union to see what it can offer. Some lenders will also let you apply with a co-signer or opt for a secured personal loan if your credit isn’t up to scratch.
Finally, you could look for a peer-to-peer loan or a payday alternative loan (PAL) from a credit union, both of which may have more flexible credit requirements than traditional personal loans.
Be wary of loans that don’t require a credit check, though, since they may be payday loans with exorbitant interest rates and fees. Payday loans typically require repayment within a matter of weeks and can have fees equivalent to APRs of 400% or more.
Where to Get a $2,000 Loan
Long-term Costs of a $2,000 Loan
The long-term costs of a $2,000 loan will vary depending on your interest rate, fees and repayment terms. The lower your rate and fees, the smaller your costs of borrowing will be.
You can also reduce your costs of borrowing by opting for a shorter loan term. The downside of selecting a short loan term, however, is that your monthly payments will be higher.
For example, let’s say that you borrow a $2,000 personal loan at a 10% rate. With a one-year repayment term, your monthly payment would be about $176 and you’d pay $110 in total interest charges. On a two-year term, your monthly payment would be $92, but your total interest charges would be nearly double at $215.
Use our personal loan calculator to estimate both your monthly payments and long-term costs on different repayment terms. Shopping around for a $2,000 loan offer can also help you find a loan that fits your budget.
More From Advisor
- How To Calculate Loan Payments
- Best Peer-To-Peer Personal Loans Of 2022
- How To Get A $20,000 Personal Loan
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
