Best Banks for Personal Loans | Top Lenders, Pros and Cons
A personal loan can come in handy in many situations. You can use it to sort out an emergency, cater for medical bills, pay school fees or sponsor a vacation. Personal loans are also good for those looking to build a good credit history.
Currently, the interest rates for personal loans range from 3 to 36%. This differs depending on such factors as the borrower’s income, credit score, and income-to-debt ratio. Online lenders, banks, and credit unions are the common personal loan lenders.
Banks are the most preferred lenders. To get the best rates on personal loans, you’ll have to shop around for the best lenders. In this article, we’ll tell you what to look for in lenders and point you to the best banks for personal loans.
- APR
- Amount
- Credit Score
Marcus
- 6.99 - 19.99%
- $3,500 - $40,000
- 660
LightStream
- 4.49 - 20.49%
- $5,000 - $100,000
- 660
PNC Bank
- 7.24 - 25.34%
- $1,000 - $35,000
- None
- APR
- Amount
- Credit Score
American Express
- 6.91 - 19.97%
- $3,500 - $25,000
- None
HSBC
- 6.99 - 22.90%
- $3,000 - $30,000
- 700
Wells Fargo
- 5.99 - 24.49%
- $3,000 - $100,000
- None
- APR range
- Fees
- Terms
- Amounth
- Unemployment protection
Bank 1
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Bank 2
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Bank 3
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Table of Contents
Pros and Cons Of Personal Loan Banks
| Pros | Cons |
|---|---|
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Fixed interests – personal loans from banks come with fixed rates. They remain the same regardless of the changes in the national average. This saves your cost. Plus you can easily budget and keep your monthly repayments on track |
Personal bank loans tend to have higher APRs compared to those of secured loans. Most of them are unsecured hence risky to the lender resulting in higher rates |
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Faster processing – depending on the bank in question, personal loans usually take a shorter time to be processed. After processing, the money is usually wired to you within 24 hours. This way, you can easily take care of your emergencies |
Those with lower credit scores mostly don’t qualify – most banks are usually reluctant to offer loans to those with poor credit profiles |
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Most bank personal loans are unsecured – Most bank loans don’t require collateral. You, therefore, won’t have to risk losing your home, vehicle, or any valuable asset to the lender should you default on the lender agreementMost bank personal loans are unsecured – Most bank loans don’t require collateral. You, therefore, won’t have to risk losing your home, vehicle, or any valuable asset to the lender should you default on the lender agreement |
Usually attracts fees – you’ll usually part with such fees as origination fees and late repayment fees. Borrowers with low credit scores are susceptible to even more charges |
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Lower interests – personal loans usually attract lower interests compared to payday and pawn loans whose interests can go to as high as 400%. Such loans could easily have you drowning in a recurrent debt cycle that’ll hurt your credit profile |
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Flexible repayment terms – Most personal loans from the bank come with very flexible repayments. You’ll have a reasonable timeframe to repay your loan |
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Top 5 banks for personal loans
If you are planning to take a personal loan, here are the top banks you should consider;
1. Marcus – Overall Best
Marcus is a personal loans lender known to offer the best terms, loan amounts, and terms. It’s mainly known for debt consolidation, having the best loan offers for clearing multiple debts with lower rates.
- Interests – Marcus has some of the lowest rates, starting at 6.99%. Such will result in the loan being cheaper.
- Terms – Marcus features flexible loan terms for members. The lender allows borrowers to change repayment up to three times through the life of the loan. Plus, the repayments are also divided into affordable amounts. This way borrowers will hardly feel the pinch when servicing their loans. And, they’ll also hardly fail to make repayments.
- Eligibility requirement – credit history, income source, income-to-debt ratio, and ability to repay are what Marcus looks for in a potential borrower. You’ll be required to have a credit score of not below 660. Please note that Marcus doesn’t accept co-signors
| Pros | Cons |
|---|---|
|
Lower rates on personal loans |
Doesn’t offer co-signed loans |
|
Flexible repayment terms |
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Friendly eligibility requirements |
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2. Wells Fargo – Highest Loan Amount
Wells Fargo is one of the US largest banks with over 5000 branches spread across 36 states. They’ve won the hearts of borrowers with their rates, repayment terms, and good customer service. They’re mostly known for home improvement loans.
Here’s a summary of what the lender has to offer;
- Interest rates – Wells Fargo offers some of the most competitive rates on its loan products. Borrowers with good credit scores especially get some of the best rates. Those who qualify for, and activate auto-pay get entitled to a 0.25% interest discount.
- Repayment terms – Wells Fargo boasts flexible and affordable repayment terms. Their repayment period ranges from 12 to 84 months.
- Key qualification requirement – Apart from other basic requirements, you must be an existing Wells Fargo customer to qualify for a personal loan
- No common fees charged – You won’t need to pay origination fees for your personal loan to be processed. You also won’t need to pay a prepayment penalty fee should you repay your loan early
| Pros | Cons |
|---|---|
|
Lower interests |
You can only borrow up to $100,000 |
|
Flexible terms |
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No common fees charged |
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3. Lightstream – Lowest APR
Lightstream is an online lender and the product of SunTrust Bank. It is known for large loans and the lowest rates in the industry today. It also boasts convenience, speed, and a high level of efficiency.
- Application – Application is purely online. Borrowers submit their application and wait for the approval and subsequent wiring of the funds. This is not only fast but convenient and efficient, too.
- Rates – Lightstream offers an estimated APR of 4.49 to 20.49 making its loans among the cheapest in the market today. Those with high credit scores get the lowest rates
- Loan terms – the lender features loan terms of between 2 to 7 years. They are flexible and makes it easier for lenders to keep track of repayments
- Qualification requirements – You’ll need a minimum credit score of 660 to qualify for a personal loan with Lightstream. Stellar credit history and strong repayment history will give you an upper hand. The lender will also check your income-to-debt ratio to ensure you can afford to repay the loan
- Fees – the lender doesn’t charge late repayment or origination fees. That greatly reduces your loan expenses
| Pros | Cons |
|---|---|
|
No loan fees |
No option for prequalification |
|
Competitive rates |
Needs years of credit history to qualify for a personal loan |
|
Borrowers who register for auto-pay get discounts |
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4. OneMain Financial – Best for Low Credit Score
OneMain financial is the go-to option for those with low credit scores. The lender will still consider other options before approving your personal loan application including your income, loan purpose, and income-to-debt ratio. Here’s a summary;
- Faster approval – OneMain Financial boasts an application time of as low as 10 minutes. This is fast, convenient, and effective, especially for those looking to pay for emergencies. Approval is also fast and you could receive your funds within 24 hours of approval.
- Reward programs – the lender rewards borrowers who repay their loans on time. The rewards are in form of gifts, treat in restaurants, etc.
- Credit scores – OneMain financial approves loans for even borrowers with poor credit scores. However, they have to part with higher interest rates than what other lenders offer
| Pros | Cons |
|---|---|
|
Offers loans to borrowers with poor credit scores |
Higher credit scores for borrowers with poor credit scores |
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Faster loan approval |
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Rewards responsible borrowers |
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5. HSBC – Guaranteed Approval
HSBC is among the best options, not only for easy loan approval but faster funding, too. The lender also offers the best repayment terms. Here’s a quick summary;
- Interests – HSBC offers low rates with as low as 6.99 APR. This makes their personal loan affordable to most borrowers. Borrowers with HSBC accounts are entitled to even lower rates
- Repayment terms – borrowers have flexible repayment terms including the fact that their first repayment is due in 50 days as opposed to the usual 30. This gives borrowers the chance to budget for and plan their repayment so they don’t default on their loans. The normal repayment period is 2 to 5 years. You are also allowed to change the repayment due date once through the life of the loan
- Fees – HSBC doesn’t charge origination and prepayment fees on personal loans like most lenders. However, late repayments attract 5% of your monthly repayments as a fee. The origination fee is mostly common only with online lenders. And, you’ll hardly find any lender charging prepayment fees
- Funding – You’ll receive your funds within 24 hours of approval if you are an existing HSBC customer. However, non-customers could wait up to three business days
- Credit check – the lender offers prequalification, something rare with most bank lenders. This allows potential borrowers to check their expected rates and loan terms without hurting their credit scores
| Pros | Cons |
|---|---|
|
Doesn’t charge origination fees |
Reports to two major credit agencies |
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Conducts soft credit checks, thanks to prequalification |
The lender doesn’t offer secured, co-signed, or joint loans |
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Borrowers can change repayment dates once |
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Remember to study the repayment terms of each bank before you choose one.
How to qualify for a bank personal loan
Different lenders will look at different aspects of borrowers to approve or deny them loans. The basic requirement similar across all lenders is that you must be a United States legal resident. You must also be of the legal age – 18 in most states
For verification, you’re required to present the lender with such official documents as your ID or travel passport. You’ll also require additional details like your name, address, social security number, etc.
You’ll fill these out in your application form.
Most banks also require that you must have been a member before the loan application. And, even if it’s not a requirement, being an existing customer comes with additional benefits such as discounts.
Concerning credit scores, such banks as American Express and Wells Fargo won’t mind. However, others will require you to have a score of at least 600 to qualify for personal loans.
You’ll also need to demonstrate your ability to repay the loan by demonstrating strong income, a high income-to-debt ratio, and good repayment history.
Be sure to shop around for different lenders till you find the one with the requirements that suit your situation.
A form of identification can be your driver’s license. Sometimes, your Social Security number is enough.
Alternatives to bank personal loans
Whether or not you qualify for bank loans, getting good terms with personal loans requires that you stay open to other options. Remember, the aim is to get a loan with a low rate and flexible repayment terms. The following are viable bank personal loans alternatives;
- Credit unions – these have some of the best rates and loan terms in the market. They work on affordable loans to all borrowers. Loan products are only available to members here. Plus, they consider even borrowers with bad credit scores (300 to 629)
- Online loans – these are offered by online lenders. Here, application is purely online. Just with your device and an internet connection, you can apply and get approved for your loan from the comfort of your couch. They offer loans to even borrowers with bad credit scores. You mostly receive the funds within 24 hours of application
- Home equity loans – this a low-cost loan option. You use your home as equity for your loan. However, you risk losing it should you breach the lender agreement
Frequently Asked Questions (FAQ)
No. Bank of America, for instance, doesn’t offer personal loans despite being among the best financiers. This is because most of these loans are unsecured hence risky to lenders.
Different lenders have different requirements for qualification. However, ensure you have a good credit score for good loan terms. You should also have a source of income. Check out other requirements with individual lenders.
Credit union loans, online loans, and home equity loans are among the options you could consider.
How much you can borrow depends on your credit profile and the lender. However, you can access from as low as $500 to $100,000 with any of the personal loans company above.
Yes. While some lenders may charge you early repayment fees, others won’t. determining their risk in lending you money.
