You can use a $2,000 personal loan to cover almost any small expense, such as a medical bill, car repair or home improvement project. But you may have some difficulty finding a loan for this amount — some lenders have minimum loan amounts that are higher than $2,000.
Here’s what you need to know before taking out a $2,000 personal loan, where to find one and how to apply.
You can get a $2,000 personal loan from several online lenders. Some banks and credit unions also offer them.
Online lenders offer convenience — you can apply for a loan and complete the funding process entirely online. And since these lenders don’t have the overhead costs of a traditional bank, interest rates tend to be lower.
Online lending is also one of the quickest funding options. The average funding time for online lenders is one to five business days, and some even offer same-day funding.
You can compare your prequalified personal loan rates from Credible’s partner lenders without affecting your credit.
Some banks and credit unions also offer $2,000 personal loans. With these lenders, you may be able to secure a rate discount for being an existing customer. And since credit unions are not-for-profit, member-owned organizations, you may receive a lower rate on a loan than you would with a traditional bank or online lender.
Predatory lenders, like payday lenders, offer small, short-term loans to consumers — often without a credit check. If you’re approved for a payday loan, a lender will deposit a lump sum of money into your bank account or cut you a check. You’ll have to repay what you borrowed when you get your next paycheck.
Although payday loans can be one of the easiest loans to get, they should only be used as a last resort. Many payday lenders charge sky-high rates and fees that can equate to an annual percentage rate (APR) as high as 400%.
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When you take out a small personal loan, a lender issues you a lump sum of money. You repay the loan by making fixed installment payments, plus interest, over a certain period (your loan repayment term).
Two types of small personal loans exist: unsecured and secured. An unsecured personal loan doesn’t require any collateral — like a car title or bank account — to qualify for the loan. But a secured personal loan requires you to pledge collateral, which the lender can take if you fail to repay the loan as agreed.
Borrowers likely to get a small personal loan may be looking to…
Borrowing a small amount (like $2,000) through a personal loan — and making on-time payments — can help boost your credit score.
How soon you can get a $2,000 personal loan varies based on the lender you choose. The average funding time is usually one to seven business days, but some lenders offer same-day funding or funding as soon as the next business day.
Here’s an example of how the same-day funding process works:
Credible makes it easy to compare personal loan rates to find a $2,000 loan that works best for your situation.
Before you take out a $2,000 personal loan, weigh the pros and cons.
You might benefit from a $2,000 personal loan if it’s funded soon after your car needs a sudden repair, for example.
If you believe taking out a $2,000 personal loan is the right move for you, follow these steps to apply for a $2,000 loan:
If you aim to borrow a larger personal loan, keep in mind that eligibility criteria could become stricter. After all, lenders would need to evaluate whether you could afford higher monthly payments.
Yes, it’s possible to get a $2,000 personal loan with bad credit — a smaller loan is generally easier to get approved for with a lower credit score. Some lenders have minimum credit score requirements as low as 550. But keep in mind that you’ll likely be charged a higher interest rate if you’re approved.
For example, if you have a credit score of below 670, your interest rate would likely be higher than 10.16%, the average two-year personal loan rate, according to January 2023 data from the Federal Reserve.
If you have bad credit and want to increase your approval odds or chances of securing a lower APR, consider searching for a lender that allows you to apply for a personal loan with a cosigner who has good or excellent credit. A cosigner is someone who agrees to repay your loan if you aren’t able to make payments.
The amount you’ll pay for a $2,000 personal loan depends on your interest rate and loan term. The higher your interest rate, the greater your borrowing costs will be. And the longer your loan term, the more you’ll pay in interest. You’ll also have to factor in any fees the lender charges, such as origination fees and prepayment penalties.
Let’s look at how much your payment could be based on your credit score and a three-year repayment term.
Borrowers with good credit could receive an interest rate of 12.02%. A $2,000 personal loan with that rate and term would have a $66 monthly payment, and you’d end up paying $392 in total interest.
By contrast, borrowers with low credit scores may qualify for a rate of 26.62%. The monthly payment at that rate would be higher, at $81, and you’d pay $925 in interest over the life of the loan — a difference of $533.
Credible lets you easily compare personal loan rates from multiple lenders, all in one place.
Read on for the answers to some common questions about personal loans.
You can use a personal loan to cover almost any expense, such as emergencies, home improvement projects, debt consolidation and more. But some personal loans come with restrictions.
For example, some lenders may prohibit you from using a personal loan to pay for college education expenses, business expenses or securities. Contact the lender before applying to ensure you can use the funds for what you need.
Although eligibility requirements vary, lenders usually consider these three factors when you submit your loan application:
If you’re approved for a personal loan, a lender will issue you a lump sum of money. By contrast, if you’re approved for a credit card, a credit card company will issue you a line of credit you can borrow from as needed, up to your credit limit.
Personal loans typically have lower average interest rates than credit cards. For example, the average 24-month personal loan interest rate was 9.09% in November 2021, according to the Federal Reserve. During that same time period, the average credit card interest rate was 16.44%.
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If you don’t think a personal loan is right for you, consider these alternative options: