Personal loans can help you cover costs that you might otherwise not be able to afford out of pocket. Whether you're looking to pay down existing debt, fund a home renovation project, go on an extravagant trip, or pay your medical bills, a $40,000 loan can be a big help to cover large expenses.
However, a personal loan for $40,000 comes with significant risks, and you may want to consider your other financial options before borrowing that much money.
How to get a $40,000 loan
Credit requirements for a 40k personal loan
One of the most important things lenders look for is a good credit score and a solid credit history. They'll look for "red flags" such as late payments, new credit lines, a history of bankruptcy, or maxed-out cards. Having no credit is just as bad, if not worse. These days, there are many places where you can check your credit score for free. You can also get free credit reports from each of the three major credit bureaus.
Eligibility criteria for a $40,000 loan
Lenders need proof of your current employment status to confirm you have a reliable monthly income before they can approve you for a 40k personal loan. Some lenders may set a minimum salary requirement, but that's not always specified. You can show proof of income and employment with pay stubs, W-2 forms, tax returns, or a letter from your employer verifying your hire date, job title, salary, and other details.
Your debt-to-income ratio measures the percentage of your income that goes toward monthly debt payments, like credit and car payments. You can calculate your DTI ratio by adding up all your monthly debt payments and dividing that amount by your gross monthly income.
Types of $40,000 loans
Unsecured personal loans
Most personal loans are unsecured loans. That means that lenders need to carefully scrutinize your current financial situation and history before approving your loan request in order to make sure you're creditworthy enough to repay the debt in full, since there's no collateral they can take if you don't pay them back. Banks, credit unions, and online lenders often have similar qualification requirements.
Secured loans
A secured loan is a sum of money you can borrow, guaranteed by certain collateral that you own. If you're looking for a $40,0000 loan for bad credit, secured loans are sometimes easier to qualify for than unsecured loans, because the lender is taking on less of a risk. However, if you default on a secured loan, your lender will seize the collateral to minimize its losses.
A few common examples of secured loans include:
- Mortgages: Secured by your home or property
- Auto loans: Secured by your vehicle
- Secured credit cards: Secured by a deposit
- Secured personal loans: Secured by a variety of financial assets
Applying for a $40,000 loan
Application process
Make sure to have all of your documents lined up before setting a meeting with a lender or starting the application process online. You'll have the most luck getting approved for a $40,000 loan with at least a very good credit score (at least 740) and a DTI ratio of 36% or lower.
Choosing the right lender
When choosing between different lenders, you can compare the different kinds of loans available to you, the terms, interest rates, and any fees with prequalifying. This way, you can also get a better idea of whether you're likely to get approved for your loan. However, loan prequalification doesn't always guarantee that you'll get approved for a $40,000 personal loan.
Lenders examine employment status, income, existing debt, the purpose of your loan, and other items during the prequalification process. At this point, they'll do what's known as a soft credit pull, which has no effect on your credit score. A hard credit inquiry, which comes when you formally apply for a loan, is likely to temporarily reduce your credit score.
Most credit unions, banks, and online lenders will offer prequalification to potential borrowers.
Repayment strategies for a $40,000 loan
Developing a repayment plan
The cost per month for a $40,000 loan can vary greatly based on the regular annual percentage rate (APR) and the terms of your loan. For example, a $40,000 loan, with a 10% interest rate over three years, would cost you $1,290.69 per month. But the same amount with the same rate over 10 years would cost you $528.60 per month. Make sure you're in a place to be making monthly payments, or you may find yourself in a worse place than when you started.
Options in case of financial hardship
Even the best personal loans for bad credit often have very high interest rates and other costly fees attached. So, if you have a bad credit score, you may want to reconsider taking out a loan and seek out other options.
Personal loans through a credit union are often a good option for folks without the best credit. APRs are capped at 18% by the National Credit Union Administration, and they're often more flexible with rates and terms than other lenders.
Avoiding common borrowing mistakes with a 40k personal loan
Thoroughly understanding loan terms
A $40,000 personal loan is a large chunk of cash, so only borrowers with the highest credit scores and the income to afford it should pursue one. Although there are lots of reasons to take out a loan, including medical bills and debt consolidation, there are also significant risks involved.
Loan payments charge interest, and accruing interest on a $40,000 loan could end up costing you hundreds to thousands of dollars more. If you are able, consider all your other financial options before taking out a loan with a bank, credit union, or online lender. Also, make sure to prequalify to compare rates and terms.
If you're in a tricky financial situation, consider meeting with a financial planner or advisor about your current situation and goals.
$40,000 loan offers
If you're looking for a $40,000 personal loan, here are some lenders offering competitive rates and perks for all kinds of borrowers:
LightStream Personal Loan
LightStream offers some of the best rates compared to similar lenders. Its APRs range from 6.49% to 25.29% (with AutoPay discount, rates vary by loan purpose) and are best for borrowers with excellent credit scores. You need a minimum score of 670 to qualify.
LightStream offers loans of as much as $100,000.
Read our LightStream Personal Loan review.
SoFi® Personal Loan
SoFi® is another lender offering some of the best rates on a personal loan for $40,000, with rates from 6.49% to 35.49% fixed (with all discounts) Annual Percentage Rate. You need a credit score of at least 610 to qualify. But if you have an excellent credit score, you may be able to get a better rate with LightStream. The maximum loan amount from SoFi is $100,000.
Read our SoFi Personal Loan review.
PenFed Credit Union Personal Loan
580 is the recommended minimum credit score if you're applying for a personal loan from lenders such as PenFed. This lender is usually recommended for small loans, but it may be a good option for borrowers in the market for a $40,000 loan for bad credit. PenFed offers loans up to $50,000 and its rates range from 8.99% to 17.99%.
You can apply for a PenFed loan without being a member. However, you must become one if you decide to move forward with the loan. Membership is open to everyone. You'll need to open a PenFed savings account with a minimum deposit of $5 to become a member.
Read our PenFed Personal Loan review.
Upstart Personal Loan
Borrowers looking for a $40,000 loan with no credit check should consider Upstart. This lender only requires a minimum credit score of 300, and claims to look beyond your credit score when you apply. Upstart will also consider your educational background and debt-to-income ratio. So, if you have a really low credit score, this may be a feasible option for a $40k personal loan.
Upstart only offers loans up to $50,000.
Rates range from 6.60% to 35.99% fixed.
Read our Upstart Personal Loan review.
Wells Fargo Personal Loan
Wells Fargo is a good option for borrowers looking for in-person support, especially for existing bank customers. It makes loans of as much as $100,000 and doesn't charge a lot of additional fees. (It does charge significant late fees.)
You'll be able to get a good interest rate on your loan if you have very good or excellent credit. APRs range from 6.99% to 24.49% (with relationship discount). However, you must be an existing Wells Fargo customer (for at least 12 months) to apply for a loan.
Read our Wells Fargo Personal Loan review.
Check rates
FAQs about how to get a $40,000 personal loan
What credit score is typically required for a $40,000 loan?
The required credit score can vary, but for a loan of this size, lenders often look for scores above 600. Higher scores can secure more favorable interest rates and terms.
Can I get a $40,000 loan without collateral?
Yes, it's possible to get a personal loan for $40,000 that is unsecured (without collateral). That said, it may require a strong credit history and stable income.
What is the usual repayment period for a $40,000 loan?
Repayment periods can vary, but they typically range from one to five years for personal loans. The terms can differ based on the lender and the borrower's creditworthiness.
What factors should I consider before applying for a $40,000 loan?
Before applying, consider your ability to repay, the total cost of borrowing (including interest and fees), the loan's purpose, and whether the loan aligns with your long-term financial goals.
Where can I get a $40,000 personal loan?
The most common places to get a personal loan for $40,000 are banks, credit unions, and online lenders. Reputable online lenders include LightStream and SoFi. If you need a $40,000 loan for bad credit, consider lenders such as Upstart or PenFed.
Fixed rates from 6.49% to 35.49% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 08/08/25 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. Loan amounts range from $5,000— $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive.
The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: To be eligible to receive an additional (0.25%) interest rate reduction on your Personal Loan (your "Loan"), you must set up Direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A., or enroll in SoFi Plus by paying the SoFi Plus Subscription Fee, all within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled Direct Deposit to an eligible Direct Deposit Account in accordance with SoFi's reasonable procedures and requirements to be determined at SoFi's sole discretion, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount will be lost during periods in which SoFi determines you have turned off Direct Deposit to your Checking and Savings account or in which you have not paid for the SoFi Plus Subscription Fee. You are not required to enroll in Direct Deposit or to pay the SoFi Plus Subscription Fee to receive a Loan.
Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2024 was around $33K. Information current as of 9/14/26. SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.
