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.
FAQs
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. Demonstrating that you have enough income to pay the monthly loan payments is essential. Lenders may request your pay stubs to assess income.
How much is the monthly payment on a $25,000 personal loan? ›
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| Loan Amount | Loan Term (Years) | Estimated Fixed Monthly Payment* |
|---|
| $20,000 | 3 | $617.45 |
| $20,000 | 5 | $415.07 |
| $25,000 | 3 | $771.81 |
| $25,000 | 5 | $518.84 |
13 more rowsTypically, 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. Demonstrating that you have enough income to pay the monthly loan payments is essential. Lenders may request your pay stubs to assess income.
How long will it take me to pay off a $25,000 loan? ›
It will take 43 months to pay off $25,000 with payments of $800 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
How much is the average payment for a 20k personal loan? ›
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.
How to pay off a $25,000 loan fast? ›
5 Ways To Pay Off A Loan Early
- Make bi-weekly payments. Instead of making monthly payments toward your loan, submit half-payments every two weeks. ...
- Round up your monthly payments. ...
- Make one extra payment each year. ...
- Refinance. ...
- Boost your income and put all extra money toward the loan.
Example: A six year fixed-rate loan for a $25,000 new car, with 20% down, requires a $20,000 loan. Based on a simple interest rate of 3.4% and a loan fee of $200, this loan would have 72 monthly payments of $310.54 each and an annual percentage rate (APR) of 3.74%.
What's the easiest loan to get approved for? ›
Some of the easiest loans to get approved for if you have bad credit include payday loans, no-credit-check loans, and pawnshop loans. Before you apply for an emergency loan to obtain funds quickly, make sure you read the fine print so you know exactly what your costs will be.
What is the average loan amount for a personal loan? ›
In general, personal loan amounts range from $1,000 up to $50,000, though some lenders may offer loans up to $200,000. The average personal loan amount was about $11,500 as of Q2 2023, according to data from TransUnion. Below, we look at how average personal loan balances vary by generation and state.
How do you get approved for a personal loan? ›
4 common personal loan requirements
- Credit score and history. Your credit score is one of the most important factors lenders consider when determining your eligibility for a personal loan. ...
- Income. ...
- Debt-to-income ratio. ...
- Collateral.
A $20,000 loan at 5% for 60 months (5 years) will cost you a total of $22,645.48, whereas the same loan at 3% will cost you $21,562.43. That's a savings of $1,083.05. That same wise shopper will look not only at the interest rate but also the length of the loan.
How to pay off $25,000 in debt? ›
5 simple ways to get rid of $25,000 in credit card debt
- Set specific goals.
- Utilize debt repayment strategies.
- Consider debt consolidation.
- Ask for a lower interest rate.
- Use a debt management company.
A guideline for the right amount of student loan debt
Personal finance specialists often advise students to take on less student loan debt than the average starting salary of their desired career. If you stick to this guideline, specialists say, you should be able to repay your loans within ten years.
How much are payments on a $25,000 personal loan? ›
The monthly payment on a $25,000 loan ranges from $342 to $2,512, depending on the APR and how long the loan lasts. For example, if you take out a $25,000 loan for one year with an APR of 36%, your monthly payment will be $2,512.
What do you need to get approved for a 20k loan? ›
Requirements for a $20,000 Personal Loan
This means they'll want to see your credit score, income level and DTI ratio. Requirements vary by lender, but most lenders require borrowers to have a credit score in the good to excellent range — meaning a score of at least 670.
How much is the monthly payment on a $35,000 loan? ›
Long-Term Costs of $35,000 Personal Loan
| Interest Rate and Loan Term | $35,000 Personal Loan Payment |
|---|
| 18.00% APR for 60 months | $888.77 |
| 29.99% APR for 24 months | $1,956.77 |
| 29.99% APR for 36 months | $1,485.61 |
| 29.99% APR for 60 months | $1,132.15 |
5 more rowsA $20,000 loan at 5% for 60 months (5 years) will cost you a total of $22,645.48, whereas the same loan at 3% will cost you $21,562.43. That's a savings of $1,083.05. That same wise shopper will look not only at the interest rate but also the length of the loan.
What would be the interest due on a loan of $25,000 borrowed at 7% for a period of three years? ›
On a loan of $25,000 taken out at 7% for a three-year term, interest would be owed in the amount of $5,250.
What is the average payment for a $30000 loan? ›
The bottom line
A $30,000 home equity loan will typically cost anywhere from $299.83 to $376.30 per month, depending on whether you choose a 10-year or 15-year term. As you decide which term works best for you, consider your short- and long-term goals.
What credit score do you need to get a 30k personal loan? ›
This allows them to look at your history from the past seven years and see whether you've typically made payments on time. 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.
