Years ago, if you wanted a personal loan, you went to your bank. Today, borrowers can open a browser and apply for a personal loan from multiple online lenders. But if you love your bank and have an enviable credit score, you may find that a traditional bank or financial institution is the best place to get a personal loan.
Not all banks offer personal loans. (Bank of America, Chase and Capital One are three that don’t.) Banks that do offer personal loans typically have competitive interest rates, and customers with bank accounts in good standing may benefit from larger loan amounts, a smooth application process and rate discounts. A personal loan obtained from a bank can be used for a variety of purposes, including debt consolidation, home improvements or emergency expenses.
Here are options for bank loans, plus tips on how to qualify, how much it costs and alternatives to bank loans.
The best bank loans
Loan amounts, rates and terms, funding time and qualifications vary by lender.
|Lender||Typical APR range||Loan amounts||Best for|
|American Express||6.9% - 18.98%||$3,500 - $40,000||Debt consolidation|
|Barclays||5.74% - 20.99%||$5,000 - $35,000||Debt consolidation|
|Citibank||7.99% - 17.99%||$2,000 - $50,000||Co-signers|
|Discover||6.99% - 24.99%||$2,500 - $35,000||Debt consolidation|
|LightStream||3.99% - 16.99% (with autopay)||$5,000 - $100,000||Home improvements|
|Marcus by Goldman Sachs||5.99% - 28.99%||$3,500 - $40,000||Flexible payments|
|PNC Bank||5.99% - 25.44%||$1,000 - $35,000||Rate discounts|
|U.S. Bank||7.49% - 17.99%||$3,000 - $25,000||Secured financing|
|Wells Fargo||7.49% - 24.49%||$3,000 - $100,000||Home improvements|
Best banks for debt consolidation: American Express, Barclays, Discover
American Express is best known for its credit cards, but it also offers personal loans to qualified AmEx cardholders who receive a preapproval offer from the company. Borrowers can use the loan to pay off up to four non-Amex credit cards.
Barclays, a British bank, offers U.S. customers online personal loans with low starting rates and no fees. For borrowers consolidating credit card debt, it will directly pay off balances on up to five cards.
Discover offers low starting rates on its personal loans and allows for direct payment of creditors, which makes consolidating debt easier.
Best banks for flexible payments, rate discounts: Marcus, PNC
Marcus is an online lender run by the investment bank Goldman Sachs. In addition to low starting rates and no fees, Marcus also offers payment flexibility. Applicants can choose a custom payment amount and loan term, and after 12 consecutive on-time payments toward your loan, you may get the option of skipping a loan payment without incurring extra interest or fees.
At PNC, banking customers can get a 0.25% rate discount on a personal loan if they choose autopay from a PNC checking account. Applications can be submitted online, by phone or in person at a PNC branch.
Best banks for home improvements: LightStream, Wells Fargo
LightStream, the lending division of SunTrust Bank, offers large loan amounts and rates that are among the lowest available. And funding is fast: Qualified borrowers can apply online, be approved and receive a loan as soon as the same day.
Wells Fargo offers personal loans with high borrowing amounts and competitive rates, making it a strong option for funding home improvements. Existing customers can apply for and get a loan funded online, while new customers must apply at one of the bank’s 5,700 branches. Wells Fargo may also offer rate discounts for customers with a checking account or certificate of deposit.
Best banks for co-signers: Citibank
Citibank accepts co-applications, which is similar to having a co-signer and can help improve your chances of qualifying or getting a lower rate. Existing customers who apply at a Citibank branch can borrow up to $50,000, while borrowing amounts are limited to $30,000 for online applications and $12,500 for new customers.
Best banks for a secured personal loan: U.S. Bank
U.S. Bank’s Premier loan is available only to existing bank customers, and a branch visit is required to complete the application. Applicants can improve their chances of qualifying by securing the loan with a car title or a certificate of deposit.
How much will it cost?
Use our personal loan calculator to see estimated rates and payments for a personal loan.
How to qualify for bank loans
Bank loans may offer benefits for their customers, but they typically have tougher credit score requirements than online loans. Consider the following tips to improve your chances of qualifying.
- Build your credit. Check your credit report for errors that may be hurting your score and dispute the errors online. Aim to make all of your debt payments on time, keep your credit utilization ratio low and avoid opening new accounts ahead of your loan application.
- Add a co-applicant or co-signer to your application. This can help you qualify for a loan that you wouldn’t on your own because of bad credit or low income. Banks that accept co-applicants or co-signers include Citibank, LightStream and Wells Fargo.
- Boost your income and pay down debt. This improves your debt-to-income ratio, or the percentage of your monthly debt payments divided by monthly income, a factor considered by some lenders. The lower the percentage, the better.
Bank loan alternatives
Whether you’re a loyal bank customer or not, it’s always smart to consider other options for personal loans. The best loan for you is one with the lowest rate possible and payments that fit into your budget.
Credit unions: These not-for-profit, member-only organizations consider loan applicants’ full financial picture and are more likely to approve borrowers with average or bad credit. Rates on loans at federal credit unions are capped at 18%.
Online loans: With online lenders, you can complete the entire loan process on a mobile device and get funding within a day or two. Unlike some banks, online lenders typically let you pre-qualify for financing to see your estimated rate. This triggers a soft credit pull, so you can check your rate and terms at several lenders without impacting your credit score.
Home equity loans and HELOCs: This may be a lower-cost borrowing option if you have equity in your home, but you also risk losing your home if you fail to repay the loan.