Best Bank Loans of October 2020

Best Bank Loans of October 2020

Do All Banks Offer Personal Loans?

No, not all banks offer personal loans. Bank of America, one of the biggest financial institutions in the country, doesn’t carry them, for example. Most personal loans are unsecured, meaning they are not backed up by an asset that the lender can take if you default, and some banks don’t want the risk. Others just don’t want to deal with the expense of lending and servicing relatively small, four- and five-figure amounts.

Other large banks that do not offer unsecured personal loans are Capital One and Chase.

What Do I Need to Qualify for a Personal Bank Loan?

If you’re looking to get a bank personal loan, you need to get your paperwork in order first. Before applying, check your credit score and pull your credit report through AnnualCreditReport.com. This will give you an idea of whether or not you’ll qualify for a bank personal loan, as well as how low your interest payments will be.

Most banks require good to excellent credit from personal loan applicants. So you might need a higher credit score than you would for, say, a secured loan (one that does require collateral, like an auto loan or mortgage) or even a credit card. Still, if you have a solid repayment history, avoid maxing out your credit cards, and can prove your creditworthiness, there’s a strong chance you’ll qualify for a bank personal loan.

Do I Need to Be an Existing Bank Client to Get a Loan?

If you’re interested in a personal loan from a bank you don’t have a relationship with, make sure that being a client isn’t a requirement before applying. Not all banks request personal loan borrowers be account holders, but some do—or they offer better terms to current clients. Also, you might need to open a checking or savings account there to take advantage of auto-pay discounts on the loan (the payments have to come from an in-house account).

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What Are Alternatives to Bank Loans?

While many banks offer personal loans, there are some limitations. As noted above, many require you to have an account with the bank before taking advantage of a personal loan. Others might take longer to get you your loan. You might want to explore the below alternatives to banks for personal loans.

Credit Unions

If you have less-than-stellar credit, you may want to reach out to credit unions near you for personal loans. While many require an account with the credit union to be open first, many are competitive with APRs and low amounts to borrow. This is helpful if you don’t need to borrow too much to cover an emergency.

Online Lenders

Many online lenders, or non-brick-and-mortar banks, give you quick and easy access to personal loans. You can see if you prequalify before applying, which doesn’t hurt your credit. If you do decide to apply, you can do so within a few minutes online, rather than visiting a branch in-person. After approval, you can usually get funds fairly quickly—sometimes within a day. The best online lenders offer little to no fees, flexible repayment terms, and competitive APRs.

The best banks for personal loans vary in your needs, but many have competitive offers for a variety of different potential borrowers. Before you choose to take out a personal loan with a bank, make sure you review all your options, including alternatives, first. Depending on your needs and how quickly you need money, you may find some banks or lenders are more friendly than others. If it takes you days or weeks to apply for a loan and get your money, that won’t help in a time-sensitive situation.

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Methodology

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders for all borrowing needs. We collected over twenty five data points across more than fifty lenders including interest rates, fees, loan amounts and repayment terms to ensure that our content helps users make the right borrowing decision for their needs.

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