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If you need to borrow money for an emergency expense or large purchase, it may be difficult to find a lender to loan you a small amount, like $4,000 — but it’s possible. You’ll need to look for lenders who offer lower loan amounts and make sure your credit score fits within their requirements to increase your chances of getting approved.
Keep reading to learn where to get a $4,000 personal loan, how to apply for one, and how much the monthly payments might be.
Where to get a $4,000 personal loan
You may be able to get a personal loan through many different kinds of lenders — online lenders, banks, and credit unions. Each will have its own qualifications, including credit score and debt-to-income ratio.
Before you decide on a personal loan, it’s a good idea to comparison shop for the lowest rate available to you. Credible makes it easy to see personal loan rates from multiple lenders.
Many online lenders offer lower minimum loan amounts compared to more traditional financial institutions, like large banks. Plus, they may be the faster route, since online lenders often list their minimum loan requirements right on their website. You can submit an application online and receive funding for your loan within a few business days, or even sooner in some cases. Since they don’t have the overhead costs of maintaining physical branches, online lenders typically offer lower interest rates too.
Online lenders have varying requirements for loan approval. You can find lenders who work with borrowers across the credit spectrum, from those with excellent credit to bad credit. Others may consider additional factors when deciding whether to lend you money, such as your income and employment status.
You can apply for prequalification with many online lenders, which lets you see your potential loan rate and term before you submit a full application. The prequalification process won’t affect your credit score since it’s a soft credit check — this allows you to shop around and compare multiple lenders before you make your decision.
Banks and credit unions
Banks and credit unions may offer loans as low as $4,000, though application and funding times may be slightly longer compared to online lenders. If you want to borrow money with a bank, you’ll most likely need good to excellent credit to be approved for a personal loan.
If you have an existing relationship with a bank, you may find it easier to be approved for a loan, even if it’s for a low amount. Some banks may even require you to be a current customer or have an existing checking account or savings account with them in order to apply for a loan.
Banks may allow you to submit an application online, especially if you’re an existing customer — new customers may need to apply in person at a local branch.
Getting a personal loan from a credit union is similar to getting a loan from a bank, though you’ll most likely have to be a member of the credit union before applying. But since credit unions are not-for-profit institutions that serve their members, they may have less-stringent borrowing requirements and could offer lower interest rates than a traditional bank. Credit unions are also more likely to approve smaller loan amounts.
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How soon can you get a $4,000 personal loan?
Depending on the lender, you may be able to get a $4,000 personal loan as soon as the same business day. To do so, you’ll probably need to apply through an online lender, since many offer approval timelines within a few hours.
In order to get a same-day loan, you’ll need to make sure you have all necessary documentation ready, such as your photo ID, Social Security number, and proof of income. You’ll also need to provide your banking information so that the lender can deposit the loan funds into your account.
Keep in mind that if you apply for a loan in person, approval may take longer. You may receive your loan funds in a few business days, or longer, depending on when your bank processes the deposit.
You can use Credible to see your prequalified personal loan rates in minutes.
How to get a $4,000 loan
If you’re ready to apply for a $4,000 personal loan, follow these steps:
- Look at your credit. Lenders look at your credit history and score to assess how likely you are to repay a loan and what interest rate and loan terms to offer you. Knowing where your credit stands before applying for a $4,000 loan can give you a good idea of what rates you may qualify for. If your credit score is too low, you can take the necessary steps to improve it before applying. To request a free copy of your credit report from the three main credit bureaus, visit AnnualCreditReport.com. Make sure to dispute any errors you find, since this could help you improve your credit score.
- Shop around and compare multiple lenders. Comparing different loan options will help you select one that offers the best rates and terms for your needs. Look at any fees a lender charges and factor that into the cost of your personal loan. Many online lenders allow you to check your rate and term without affecting your credit score.
- Select a lender and fill out an application. Once you’ve selected a lender, it’s time to complete the application process. Follow the lender’s instructions and submit any necessary documentation, such as your tax returns or pay stubs. Depending on the lender, it could take anywhere from a few hours to several business days to receive a loan decision.
- Sign the loan agreement. If the lender approves your loan application, you’ll need to provide your bank account information and sign for your loan so the funds can be sent to you. Depending on the method of payment and lender, this could take a few business days to a week.
Your credit score is a major factor in qualifying for a personal loan. Typically, the higher your score, the more likely you’ll be approved for a loan with the lowest interest rates.
That being said, a smaller loan is usually easier to get approval for if you have a lower credit score. Some lenders specifically work with borrowers who have poor credit. Just keep in mind that you’ll probably receive higher interest rates, and you might not have as many loan options as someone with good credit.
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How much will a $4,000 personal loan cost?
Aside from the interest rate, which is the cost you pay the lender to borrow money, you may have to pay fees to get a $4,000 loan. Some common personal loan fees include origination fees, which is a cost lenders add on to process your loan application, and prepayment penalties, which some lenders charge if you pay off your loan ahead of schedule.
If the lender charges an origination fee, it’ll typically be subtracted from the total loan amount you receive. Original fees can range anywhere from 1% to 8% of the loan amount. So, if the lender charges an origination fee of 1%, $40 would be taken out of your $4,000 loan, and you’d receive $3,960.
What’s the monthly payment on a $4,000 personal loan?
Your monthly payment for a $4,000 loan will depend on factors like your interest rate and repayment term. You’ll most likely pay more each month if your interest rate is higher.
For example, if you have a 750 credit score and qualify for a $4,000 personal loan with a three-year term and a 9.45% APR, your monthly payment would be $128 and you’d pay a total of $609 in interest.
In comparison, if you have a lower score of 600 and qualify for the same three-year personal loan with an APR of 24.97%, your monthly payment would be $159. While an increase of $31 per month doesn’t seem like a big deal, you’ll end up paying $1,723 in interest over the life of the loan with the higher rate — that’s $1,114 more in total interest than the personal loan with the lower rate.
You can compare personal loan rates with Credible, and it won’t affect your credit score.
Here are answers to some commonly asked questions about personal loans.
How fast can you get a small personal loan?
How fast you can get a personal loan depends on the lender you choose. For example, online lenders are typically the fastest option since many offer approvals within minutes. Some even offer funding on the same or next business day you apply. Banks and credit unions can typically fund a loan within one to seven business days, depending on how quickly they can process the loan transaction.
What can you use a personal loan for?
You can use a personal loan for almost anything, such as paying medical bills, funding home improvement projects, or consolidating high-interest credit card debt. Some lenders may impose restrictions, though. For example, you typically can’t use personal loan funds to pay for business or education expenses.
What are the requirements for a personal loan?
Personal loan qualification requirements vary depending on the lender. In general, you’ll need to meet a lender’s minimum credit score and income requirements. That means you’ll most likely need to have an established credit history and some form of steady income.
How do personal loans compare to credit cards?
Depending on your credit profile, personal loans generally come with lower interest rates compared to credit cards. However, personal loans are closed-end loans, meaning you’re only allowed to borrow a lump sum of cash upfront and then repay it in fixed monthly installments. Credit cards are a form of revolving credit, where you can keep borrowing up to your credit limit as long as you continue to pay down your balance.