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
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.
How much would a $25,000 loan cost per month? ›
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 credit score is needed for a $25,000 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 is a $20,000 loan for 5 years? ›
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.
What is the average monthly payment on a $20000 personal loan? ›
Example Monthly Payments on a $20,000 Personal Loan
| Payoff period | APR | Monthly payment |
|---|
| 12 months | 15% | $1,805 |
| 24 months | 15% | $970 |
| 36 months | 15% | $693 |
| 48 months | 15% | $557 |
3 more rowsAug 31, 2021
$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 is the interest rate on a $25,000 personal loan? ›
Interest from 16% - 29.95% p.a. Maximum tenure ranging from 4 months to 36 months.
Does a personal loan hurt your credit? ›
A personal loan can affect your credit score in a number of ways—both good and bad. Taking out a personal loan isn't bad for your credit score in and of itself. However, it may affect your overall score for the short term and make it more difficult for you to obtain additional credit before that new loan is paid back.
Are personal loans hard to get? ›
Personal loans generally aren't hard to get and are available from credit unions, banks, and online lenders. There are various types of personal loans to consider, depending on how much money you need to borrow.
How much can you borrow with a personal loan? ›
Personal loan amounts generally range from as low as $1,000 to as high as $100,000. The exact range varies from lender to lender. For example, among the best personal loan lenders, there are lenders that offer loans from $1,000 to $50,000, $2,000 to $30,000, and $5,000 to $100,000.
Personal loan rates range from around 7% to 36%, with the average hovering around 12-15% for a 3-year loan. A good interest rate on a personal loan is one that is lower than the national average.
Is it hard to get approved for a 20k loan? ›
Generally, you'll need a good to excellent credit score — 670 or higher — to qualify for a $20,000 loan. The higher your credit score, the better your chances of qualifying for a loan and securing a lower interest rate.
How hard is it to get a personal loan from Chase Bank? ›
Even if you have Chase credit cards, a Chase mortgage, and Chase bank accounts in good standing, you can't get a personal loan through Chase. Fortunately, you have many personal loan lenders to choose from.
What credit score do you need for a 20k personal loan? ›
You will likely need a credit score of 660 or higher for a $20,000 personal loan. Most lenders that offer personal loans of $20,000 or more require fair credit or better for approval, along with enough income to afford the monthly payments.
How hard is it to get a $30,000 personal loan? ›
Having a strong credit score and credit history is vital to qualify for a $30,000 personal loan. Lenders have varying requirements, but a good credit score is often necessary to secure a sizable loan. Additionally, a high credit score can lead to lower interest rates and more favorable loan terms.
Why are personal loan rates so high? ›
Personal loan rates are so high because the Federal Reserve has increased its target interest rate 11 times since early 2022 in response to high inflation. The interest rates on personal loans tend to go up when the Fed raises its rate.
How much would a $250,000 loan cost per month? ›
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. It's important to note that these estimates only include principal and interest.
How much is a 250K loan a month? ›
$250K Mortgage Term Length Example
If you secure a 7% fixed interest rate and a 30-year loan term, you'll pay about $348,772 in interest when all is said and done. Your monthly mortgage payment would amount to $1,663 (without insurance and property taxes).
What credit score do I need for a $50,000 loan? ›
Most lenders prefer borrowers with a credit score in the good to excellent range (670 or higher), indicating a history of responsible financial management.
