How Much Does a $5,000 Personal Loan Cost? (2024)

Personal loans can be a useful tool if you need to consolidate debt, deal with surprise expenses or finance a life change. They can help you invest in future success or respond to something unexpected in the present.

As you probably know, over the life of a loan you end up paying the lender back more than they lent you. That’s because interest charges and fees are charged to compensate lenders for the use of their money and the risk of not being repaid. Exactly how much you pay will depend on your unique financial situation. Get a full picture of what could affect your payments on a $5,000 loan.

What is the interest rate on a $5,000 loan?

There’s no single interest rate on loans of a certain size; interest rates on personal loans vary by individual and are determined by several factors. While your loan amount could play a role in your interest rate, it’s not the defining factor. Before getting into how much $5,000 loan payments might be, it’s helpful to understand what determines a loan’s interest rates.

Here are some things that can influence your loan’s particular interest rate:

• Your credit history. Some lenders look at your credit score, which is a number that communicates to lenders how much they can trust you to repay the loan based on your financial history. Others may look at a credit report but not credit scores. Interest rates tend to be higher for people with spotty credit history because the lender wants to compensate for risk assumed on their part. Learn more about why your credit score matters to most lenders.

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• Your debt-to-income ratio. Your total monthly debt payments divided by your gross monthly income determines your debt-to-income ratio, another factor that signals your riskiness to lenders.

• Secured vs. unsecured loans. You may get a lower interstate rate on a secured loan, which is a loan that’s “secured” with something like a car or truck (collateral). For example, payments on a $5,000 loan with a car used as collateral will likely be less than a loan without collateral.

• Loan amount and length. A larger loan may come with a higher interest rate than a lesser loan because they carry more risk to the lender. The longer your repayment period is, the higher the rate and the higher the total amount you’re likely to pay as well.

• Your lender. Lenders can determine the interest rates they set. Some allow you to shop prequalification offers without a credit check, so you may want to explore your options with multiple lenders before officially applying. Start with OneMain prequalification offers to see where you stand.

• The Federal Funds Rate. You’ve probably heard of “The Fed” and their interest rates. It’s a complicated relationship, but the Federal Reserve’s interest rate sets a benchmark for lending by banks to one another and influences the rates banks and other lenders charge consumers. Learn more about how interest rates are determined.

Is it hard to get a $5,000 loan?

Many of the factors that determine your interest rate and payments on a $5,000 loan will also determine your likelihood of getting approved for a loan. Your credit score, debt-to-income ratio, income, credit history and the size and type of loan could all play into a lender’s decision. If you show lenders that you have the means to repay your loan and a responsible history of paying what you owe, it shouldn’t be hard to find one that will work with you on a $5,000 loan.

Is $5,000 a low amount for a loan?

In the first quarter of 2022, the average amount of a newly issued, unsecured personal loan was $6,656.¹ So, $5,000 can be considered average, if not below average, for a new personal loan. For example, OneMain offers personal loans from $1,500 to $20,000.²

When it comes to the application process, it’s often quick, easy and convenient. OneMain, for instance, works with people online, on the phone and in person to help get them a personal loan. Learn more about how easy it could be to get a personal loan.

How much would a monthly payment be on a $5,000 loan?

Your monthly payment on a $5,000 personal loan depends on the term length and your APR (annual percentage rate). Your APR is based on your interest rate, but it’s not the same thing. Your APR can include fees and charges, so it may be slightly higher than the interest rate.

Based on the OneMain personal loan calculator, a $5,000 loan with a 25% APR and a 60-month term length would be $147 per month. The loan terms you receive will depend on your credit profile, including credit history, income, debts and if you secure it with collateral like a car or truck.

How to get a $5,000 personal loan

If you’re thinking the fixed monthly payments and fixed interest rates of a personal loan are right for your financial goals, start by reading our article on the 4 steps to take before getting a personal loan. Once you apply, you’ll typically get a quick response where you’ll talk with a loan specialist to finalize the details. Then you’ll sign and be on your way to the next step on your financial road.

1. "Despite a Series of Challenges, Consumer Credit Health Remains ...." 12 May. 2022, https://newsroom.transunion.com/despite-a-series-of-challenges-consumer-credit-health-remains-relatively-strong-in-opening-quarter-of-2022/. Accessed 15 Aug. 2022.

2. Not all applicants will qualify for larger loan amounts or most favorable loan terms. Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Loan approval and actual loan terms depend on your state of residence and your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). APRs are generally higher on loans not secured by a vehicle. Highly-qualified applicants may be offered higher loan amounts and/or lower APRs than those shown above. Active duty military, their spouse or dependents covered by the Military Lending Act may not pledge any vehicle as collateral.

Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. North Dakota: $2,000. Ohio: $2,000. Virginia: $2,600.

Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: North Carolina: $7,500. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.