Borrowing $25,000 is a major financial commitment. There are times when you may need to take out such a large loan, such as if you're funding home improvement or consolidating debt. But before you do, you need to understand how much your loan will cost you.
So, what exactly are the monthly payments on a $25,000 personal loan? It depends on the interest rate that your lender charges you as well as the loan repayment term you choose. Here's what you need to know about how much you're likely to pay out of your checking account each month to your personal loan lender.
Here are the monthly payments on a $25,000 personal loan
As of May 2023, the average interest rate on a personal loan was 11.48%. If you took out a personal loan at this rate and paid it back over a decade, your monthly payments would be $351.20 per month and your total interest costs over the life of the loan would be $17,144.31.
Of course, not everyone borrows at the average rate. Some people can qualify for more affordable loans because they have excellent credit. But others may have to pay more to borrow because they don't have a great credit score or because their income is a little lower, so lenders are more nervous about default.
So, how does interest and repayment timeline actually affect your loan payments and total interest costs? Here are a few examples of what this would look like if you had different terms for your $25,000 in debt:
As you can see, your loan payment is heavily affected by both interest rates and payoff time, so you'll want to compare your options carefully. If you can shop around for rates among different personal loan lenders, you may be able to score a less expensive loan and potentially save thousands of dollars in interest over time.
What should your personal loan term be?
Your interest rate is largely determined by credit score, loan term, and income. While you can do things to change it, such as shopping around for lenders and trying to improve your credit score by picking up extra hours at work and paying down existing debt a little more, it can take time to make a big enough difference in your financial credentials to make a meaningful impact in your rates.
You can, however, have an immediate impact on your personal loan payments by choosing either a shorter or longer payoff time when you borrow. To make this decision, consider the following:
- Is it more important to be debt-free ASAP or to maintain low monthly payments? If you're worried about your payments becoming unaffordable, lower monthly payments may be the priority even if you have to pay more over the life of the loan. But if you want to keep interest costs as low as possible and becoming debt free is your major goal (even if that means temporarily sacrificing to make higher payments), a shorter payoff time makes sense.
- Would you prefer more flexibility? If you take out a loan with a longer payoff time, you always have the option to pay it off early by making extra payments (as long as your lender doesn't charge prepayment penalties). But once you've committed to a shorter payoff time, you can't just decide to make it longer if your payments become a hardship. If you'd rather have the flexibility to make payments that fit with your immediate budget, choose a loan with a longer payoff time.
By considering these issues, you can decide what type of $25,000 personal loan is right for you. No matter what you do, though, make sure you calculate the payments before you commit to borrowing so you will know exactly what obligation you're taking on in your specific situation.
Our picks for the best personal loans
Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing our picks for the best personal loans.
FAQs
Requirements for a $25,000 Personal Loan
Typically, a desirable credit score for a $25,000 personal loan is around 670 and above, but some lenders work with those who have scores from 580 and up.
How much would a $25,000 loan be a month? ›
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| Loan Amount | Loan Term (Years) | Estimated Fixed Monthly Payment* |
|---|
| $25,000 | 3 | $771.81 |
| $25,000 | 5 | $514.57 |
| $30,000 | 3 | $926.18 |
| $30,000 | 5 | $608.15 |
13 more rowsRequirements for a $25,000 Personal Loan
Typically, a desirable credit score for a $25,000 personal loan is around 670 and above, but some lenders work with those who have scores from 580 and up.
How long does it take to pay off a $25,000 loan? ›
$25,000 at 20%: Your minimum payment would be $666.67 per month and it would take 437 months to pay off $25,000 at 20% interest. You would pay $41,056.85 in interest over the life of the debt.
What are the payments on a $20000 loan for 5 years? ›
So, $20,000 at 5% for 36 months will cost $21,579.05 saving you $1,066.43. Using the calculator above (assuming $0 down payment, $0 trade-in and 1% sales tax) you will see that the monthly payment for the 5 year loan is $377.42 and the monthly payment for the 3 year loan is $599.42.
How much income do I need for a 20k loan? ›
Some lenders state they require stable, consistent income, while others list a minimum income requirement. For example, Discover requires a household income of at least $25,000. Finally, personal loan lenders consider your DTI ratio or your ratio of debt to gross income.
How hard is it to get a $30,000 personal loan? ›
For a $30,000 loan, you'll typically need a credit score above 600 just to qualify or above 700 to get a competitive rate. A high enough income: Part of the lender's evaluation of your loan application includes determining whether you can afford the payments.
What is the easiest loan to get approved for? ›
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.
What rate is too high for a personal loan? ›
Average online personal loan rates
| Borrower credit rating | Score range | Estimated APR |
|---|
| Excellent | 720-850. | 12.37%. |
| Good | 690-719. | 14.87%. |
| Fair | 630-689. | 18.40%. |
| Bad | 300-629. | 21.93%. |
May 14, 2024
The majority of lenders state that their maximum personal loan amount is $50,000, though some will go as high as $100,000. Some borrowers—such as those who are wealthy and with high credit scores—might be able to borrow more.
Reduce Your Interest Rates
Reducing the amount of interest you pay on loans and credit cards each month is an important step to take when paying down a mountain of debt. You can use the money saved on interest to make larger payments, which will help you knock out the debt faster.
How much would a $30000 loan payment be? ›
Example Monthly Payments on a $30,000 Personal Loan
| Payoff period | APR | Monthly payment |
|---|
| 24 months | 15% | $1,455 |
| 36 months | 15% | $1,040 |
| 48 months | 15% | $835 |
| 60 months | 15% | $714 |
3 more rowsAug 31, 2021
Answer and Explanation: The interest rate on a loan directly affects the duration of a loan. Note: The interest rate is calculated using the hit and trial method. Therefore, it takes 30 years to complete the loan of $150,000 with $1,000 per monthly installment at a 0.585% monthly interest rate.
How much a month would a 20k loan be? ›
The monthly payment on a $20,000 loan ranges from $273 to $2,009, depending on the APR and how long the loan lasts. For example, if you take out a $20,000 loan for one year with an APR of 36%, your monthly payment will be $2,009.
What is the average personal loan rate? ›
The average personal loan interest rate was 12.49% in February 2024 on two-year loans, according to the most recent data from the Federal Reserve. But personal loan interest rates can range from 6% to 36%, depending on your credit score, income, current debts, and other factors, such as loan term and amount.
How big of a personal loan can I get? ›
Although loan amounts vary across lenders, the maximum amount for personal loans typically ranges from $500 to $100,000. In some cases, you may qualify for a loan larger than what you need. Before accepting any loan, consider what you can afford to repay and be sure you don't borrow more than what you can manage.
How much loan can I get on $50 000 salary? ›
The rule of 2.5 times your income stipulates that you shouldn't purchase a house that costs more than two and a half times your annual income. So, if you have a $50,000 annual salary, you should be able to afford a $125,000 home. Explore what your mortgage payment might be with today's rates.
How much is a 30-year loan on $200,000? ›
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As far as the simple math goes, a $200,000 home loan at a 7% interest rate on a 30-year term will give you a $1,330.60 monthly payment. That $200K monthly mortgage payment includes the principal and interest.
How much would a $250,000 loan cost per month? ›
Example Monthly Payments On A $250K Loan
| Annual Percentage Rate (APR) | Monthly Mortgage Payment (10-Year Term) | Monthly Mortgage Payment (15-Year Term) |
|---|
| 6% Interest Rate | $2,776 | $2,110 |
| 7% Interest Rate | $2,903 | $2,247 |
| 8% Interest Rate | $3,033 | $2,389 |
Monthly payments for a $250,000 mortgage
Your monthly payment will depend on your interest rate and loan term — or how long your loan lasts. On a $250,000 fixed-rate mortgage with an annual percentage rate (APR) of 6%, you'd pay $1,498.88 per month for a 30-year term or $2,109.64 for a 15-year one.
