A personal loan is a loan obtained to finance a personal purchase like a vacation, home remodeling, and various other big purchases. They are pretty popular, and they have helped to make life easier for many people.

An often-asked question on loans is, “how much is too much to ask?” You don’t want to ask for too much money that you wouldn’t be able to pay back. You also don’t want to ask for too little money that won’t fund your needs. Asking for too little money might mean that you’ll need to take another loan, which will lead to the inconvenience of repaying two loans at once. Many people need to know how to ask for the right amount of money when requesting these loans.

So, how do you balance things? How do you ask for the right amount of money when obtaining personal loans? This article from answers all these questions and more.


List out the total expenses of what you want to fund

The first thing to do before obtaining a personal loan is to list out your expenses. For example, suppose you were to get money to fund a vacation. In that case, you will list the costs of return flight tickets, hotel accommodation, food, drinks, visa charges, souvenirs, transportation, light refreshments, etc. List everything down without leaving anything out and try to be as accurate as possible. The more comprehensive your list is, the more precise you will predict exactly how much you need to borrow.

Adjust your expenses for slight inflation and any other unforeseen increase

The prices of things go up a lot, and sudden disruptions in the supply chain like the Suez Canal blockage of March 2024 can cause an increase in prices. Since the Covid-19 pandemic, the inflation rates in the USA have been off the charts, and a lot of things are more expensive than they used to be. Take these factors into consideration when planning to obtain cash.


Find out the total cost of the loan

They come at extra costs like interest rates, opening charges, closing charges, and more. Find out the total cost of the loan and inquire if there are hidden charges. An online loan calculator can help you with finding out the total cost of a loan. The total cost of the loan minus the actual loan amount will help you know how much extra you’ll be paying for the loan and whether the loan is worth it or not. More importantly, it will help you figure out the exact amount of money to ask for, so you do not ask for more than you can repay conveniently.

What time do you have left to apply for the loan?

The amount of money asked for on your loan request determines how fast the loan will be approved. If you need the money urgently, it will do you a whole lot of good to apply for less money. Applying for more money will increase the time it takes to apply for your loan, and that will prevent you from getting the money when you need it. Consider this carefully when applying for financing.


What documentation do you have?

You’ll be asked to provide various documentation when requesting a personal loan. The more money you ask for, the more documentation that you’ll be asked for. If you don’t have enough documents to show, you should reduce the amount of money you asked for.

Find out your credit history

Your credit history is an ongoing historical documentation of your debt repayment. It is an estimate of your ability to repay loans when due without issues. Loan companies use your credit history to determine whether to borrow you money or not. If your credit history is poor, do not ask for too much because there is a high chance that your loan request will be declined. Declined loans cost you time and energy without anything to show for it.

If you can’t interpret your credit history well, you can ask an expert to do that for you. In addition, ask the expert the amount of money they feel that loan companies can borrow you comfortably. That way, you can ask for the right amount of money without any complications and with reduced possibilities of loan denial.


Check if your income can comfortably pay repayments

Your income goes a long way in determining how much you can afford to borrow comfortably. Calculate your income per month or year. Subtract your monthly expenses from your monthly income and check if the rest can cater for monthly loan repayments. Be as honest as possible with your calculations so you do not overestimate your ability to repay the loan and end up cash-strapped.

How much is the lender willing to offer?

The amount of money that the lender is willing to offer to borrowers could affect the amount of money you decide to ask for. But of course, you can change lenders if a lender doesn’t offer the amount you want, and you can’t compromise on that.


Basic need/want or unnecessary luxury

What are you obtaining the loan for? Is it a fundamental need or want, or is it an unnecessary luxury that you can’t afford, and you’ll be killing yourself to repay? Do you think the extra pressures of paying the loan are worth the loan? All these and more are what you need to consider before asking for a loan amount. If you feel that the loan is necessary and can comfortably repay it, you should go for it.


Follow this guide before determining the amount to ask for next time you need personal loans. Having money so easily could be a risk for some people and a lifesaver for others. If you need money for something that will give you more cash in the future, definitely go for it.

If it’s just a trip, a party, or something with little meaning to you or your family, then maybe you should just stop spending on expensive coffee and pay for things with money from your pocket.