Where to Get a Personal Loan

You can get a personal loan from an online lender, credit union or bank. Your interest rate and loan terms will depend on where you get the loan as well as your financial and credit information.

Each type of lender has its own benefits:

• Online lenders: These lenders offer a convenient way to find and compare personal loans online.

• Credit unions: Personal loans from credit unions may have lower annual percentage rates and flexible terms for their members.

• Banks: Some national banks offer personal loans with competitive rates and in-person support.

The best place to get a personal loan depends on where you can get the best annual percentage rate plus the loan term and features that you need.

» MORE: Best personal loans

Personal loans from online lenders

Online lenders typically offer the fastest way to get a personal loan, with some loans approved and funded the same day you apply or the next business day.

Most online lenders let you pre-qualify to preview your potential rate and term before formally applying. Lenders perform a soft credit check when you pre-qualify, so you can compare offers from multiple lenders without impacting your credit score.

Some online lenders target good- or excellent-credit borrowers (those with credit scores of 690 and above) by offering high loan amounts and low interest rates. Others cater to fair- or bad-credit borrowers (credit scores below 690). Bad-credit loan rates are usually higher, but a lender may consider factors beyond your score, such as your education or employment.

» MORE: What credit score do you need for a personal loan?

Pros and cons of getting a personal loan from an online lender

Top online lenders for personal loans

Here are some of the best online lenders offering personal loans.

Personal loans from credit unions

You typically must become a credit union member, which could require a small fee, before you can borrow a personal loan.

Credit unions may have softer requirements for borrowers with fair and bad credit. Many consider your history as a member during the loan application process, which can help your chances of approval. Federally chartered credit unions cap APRs at 18%, so borrowers with imperfect credit may receive lower rates than they would elsewhere.

Credit unions also tend to provide smaller personal loans than other lenders, which can be ideal if you need money to cover a minor car repair or other small expense. For example, Navy Federal and First Tech Federal offer personal loans starting at $250 and $500, respectively.

Pros and cons of getting a personal loan from a credit union

Top credit unions for personal loans

Here are a couple of the top credit unions for personal loans.

Personal loans from banks

Banks may offer the lowest personal loan rates and largest loan amounts to existing customers. However, you’ll likely need good credit to qualify for a personal loan from a bank.

While many banks have online loan applications, you may need to complete the process in person, especially if you’re a new customer. Some banks, such as Wells Fargo, require loan applicants to have an active checking or savings account before applying.

Unlike online lenders, a bank may have a branch near you where you can speak with a loan officer in person.

Pros and cons of getting a personal loan from a bank

Top banks for personal loans

Here are a few of the best banks offering personal loans.

How to choose a lender

When shopping for a personal loan, consider the annual percentage rate, which includes the interest rate and any extra fees. It’s the best apples-to-apples cost comparison between two loans.

Also consider the loan term, which impacts your monthly payment. Typical terms are two to seven years. A longer loan term means lower monthly payments, but more total interest.

Finally, compare consumer-friendly features from different lenders. For example, with some debt consolidation loans, lenders will send money directly to creditors, eliminating that step for you. Other lenders may let you change your payment due date or skip a payment if you’re facing financial hardship.

» MORE: What are the requirements for a personal loan?

Types of loans to avoid

Loans with high interest rates and short repayment periods can be costly and should be a last resort after considering other borrowing options.

Payday loans: Payday loans are small, high-cost loans that you need to repay by your next payday. Fees can be about $15 for every $100 borrowed, which makes the APR nearly 400% for a two-week loan. Many payday loan borrowers find themselves in a cycle of debt, borrowing again if they aren’t able to repay the loan when it's due.

High-interest installment loans: High-interest installment loans with rates above 36% and repayment periods ranging from a few weeks to several months can also be difficult to repay. Most consumer advocates consider a loan with interest rates above 36% to be unaffordable.