You have numerous options when it comes to personal loans. You can get one from a bank, credit union, or online lender. However, you may find that a personal loan from a bank offers a more personalized experience.
One of the main benefits of a bank loan is the ability to get in-person customer service at a local branch. But many banks also offer online loan applications and mobile apps. Plus, you may be able to get a discount on your personal loan rate if you’re an existing member.
It’s always helpful to compare a handful of lenders before applying for a personal loan. Here are a few bank options to consider.
- Axos Bank: Best for good credit
- Discover: Best for fair credit
- LightStream: Best for large loans
- TD Bank: Best for no upfront fees
- U.S. Bank: Best for small loans
Plus:
- What to consider when comparing lenders
- Pros and cons of personal loans from banks
- How to get a personal loan from a bank
- Is a bank loan right for you?
1. Axos Bank: Best for good credit
Axos Bank offers may be right for you if you need to borrow a large amount of money. The lender also offers flexibility — you can move your monthly payment due date by up to 10 days if you need to.
You can use an Axos Bank loan for nearly any purpose, though the lender prohibits the use of funds for investing, post-secondary education, and short-term real estate bridge financing. You’ll also need a high credit score to qualify — 700 or above — and at least four years of good credit history. Axos Bank is a Credible partner lender.
- Interest rates: 7.99% to 14.99%; fixed
- Loan amounts: $5,000 to $50,000
- Loan terms: 3 to 6 years
- Minimum credit score: 700
- Loan types: Debt consolidation, credit card refinancing, home improvement, business, medical, vacation; unsecured
- Funding time: As soon as 2 days after signing loan agreement
- Eligibility: Must have verifiable income; must have at least 4 years of good credit history
- Fees: Origination fee of 1% to 2% of loan amount; late fee of $15; insufficient funds fee of $25; no prepayment penalties
- Cosigner acceptance: No
- BBB rating: A+
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2. Discover: Best for fair credit
Discover offers personal loans for borrowers with fair to excellent credit. Loan amounts range from $2,500 to $40,000, and the lender has flexible repayment terms.
Discover doesn’t charge origination or prepayment fees, which can make a loan more affordable. In addition, Discover offers free access to your FICO credit score and other credit report information. Discover is a Credible partner lender.
- Interest rates: 6.99% to 24.99%; fixed
- Loan amounts: $2,500 to $40,000
- Loan terms: 3 to 7 years
- Minimum credit score: 660
- Loan types: Debt consolidation, home improvement, medical expenses, vacation funding, wedding financing, financial emergencies, auto expenses, pet emergencies, small business, and more
- Funding time: As soon as 1 business day after loan acceptance
- Eligibility: Be a U.S. citizen or permanent resident; be at least 18 years of age; have a minimum individual or household income of at least $25,000
- Fees: Late fee of $39; no origination, application, or prepayment fees
- Cosigner acceptance: No
- BBB rating: A+
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3. LightStream: Best for large loans
LightStream is an online platform that offers loans to individuals with good to excellent credit profiles. Unlike some lenders, LightStream offers benefits like an autopay discount. When you sign up for automatic payments prior to loan funding, you can qualify for a 0.50 percentage point discount on your interest rates.
In addition, LightStream has a convenient mobile app that makes it easy to check your loan balance and make payments. However, the lender has a high minimum loan amount, so if you only need a small loan, you’ll need to look elsewhere. LightStream is a Credible partner lender.
- Interest rates: 7.49% to 24.49% (with autopay); fixed
- Loan amounts: $5,000 to $100,000
- Loan terms: 2 to 7 years (up to 12 for home improvement and RV/boat loans)
- Minimum credit score: Does not disclose
- Loan types: Home improvement, debt consolidation, medical expenses, weddings, auto loans, and more; unsecured
- Funding time: As soon as the same day
- Eligibility: Must have good credit; must have sufficient income to support your existing debts and loan amount; must have a valid Visa or Mastercard
- Fees: None
- Cosigner acceptance: No; co-borrowers accepted
- BBB rating: A+
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4. TD Bank: Best for no upfront fees
TD Bank is one of the 10 biggest banks in the U.S. If you’re approved for a personal loan, you’ll repay it in fixed monthly installments over a period of three to five years. You can even pay off the loan early since TD Bank doesn’t charge prepayment penalties.
While the lender doesn’t charge many fees, its personal loans are only available in select states. In addition, TD Bank isn’t very transparent about eligibility requirements — it doesn’t disclose many on its website prior to applying.
- Interest rates: 8.99% to 21.99%; fixed
- Loan amounts: $2,000 to $50,000
- Loan terms: 3 to 5 years
- Minimum credit score: Does not disclose
- Loan types: Debt consolidation, medical expenses, home improvement, auto purchase, weddings, vacations; unsecured
- Funding time: As soon as 1 business day
- Eligibility: Does not disclose most requirements; only available in CT, DC, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, and VT
- Fees: Late fee of $10 or 5% of the minimum payment due, whichever is less; doc stamp fee for FL residents; no application or origination fees; no prepayment penalties
- Cosigner acceptance: Does not disclose
- BBB rating: A+
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5. U.S. Bank: Best for small loans
U.S. Bank has served banking customers since 1863 and operates over 2,000 branch offices in 26 states. The bank’s minimum loan amount is only $1,000, making it a solid option if you only need to cover a small expense.
The bank rewards its existing customers with higher loan limits and lower credit score requirements. However, this means that it’s harder to qualify for a personal loan if you’re not a customer, and you may not be able to borrow as much money as you need. U.S. Bank also doesn’t disclose many of its eligibility requirements, which makes it difficult to know if you’ll qualify ahead of applying.
- Interest rates: 8.74% to 21.24%; fixed
- Loan amounts: $1,000 minimum; $25,000 maximum for non-U.S. Bank customers; $50,000 maximum for U.S. Bank customers
- Loan terms: 1 to 5 years for non-U.S. Bank customers; 1 to 7 years for U.S. Bank customers
- Minimum credit score: 720 for non-U.S. bank customers; 660 for U.S. Bank customers
- Loan types: Debt consolidation, home improvement, emergencies, large expenses, moving loans, medical bills, weddings, vacations; unsecured
- Funding time: As soon as the same day for U.S. Bank customers; within 1 to 4 business days for non-U.S. Bank customers
- Eligibility: Does not disclose
- Fees: No origination fees; no prepayment penalties
- Cosigner acceptance: Does not disclose
- BBB rating: A-
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Methodology
Credible evaluated the best bank personal loan lenders based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, and fees. Credible’s team of experts gathered information from each lender’s website, customer service department, and via email support. Each data point was verified to make sure it was up to date.
What to consider when comparing lenders
Before you agree to take on a personal loan, it’s a good idea to compare different personal loan lenders to see which one offers the best deal. There are some factors to keep in mind when shopping around, including:
- Loan amounts: Most personal loan lenders have minimum and maximum loan amounts. Consider your financial needs and choose a lender that can provide the amount you require. Some lenders may not offer large enough loans for your needs, and others may not offer small enough loans.
- Repayment terms: Lenders vary in the repayment terms they offer, and the length of your repayment term can affect your overall costs. Longer repayment terms may result in lower monthly payments, but you’ll typically pay more interest over the life of the loan. Shorter repayment terms may have higher monthly payments, but they can help you save on interest.
- APRs: The annual percentage rate (APR) is the cost of borrowing money, including interest and fees, expressed as a percentage. Compare APRs from different lenders to determine which one provides the best value. Keep in mind that some lenders may offer lower interest rates but have higher fees, which can also increase the overall cost of the loan.
- Fees: Lenders may charge several fees, including origination fees for processing your loan application and late fees. Make sure you understand all of the potential fees associated with a loan before signing your loan agreement.
Pros and cons of personal loans from banks
There are a handful of different advantages and disadvantages worth considering before you decide if a loan is the right fit for you.
Pros
- Flexibility: Personal loan funds can be used for almost any purpose, giving you the freedom to spend the money the way you want. You can even use a personal loan to consolidate multiple debts into one loan that may lower your monthly payments and overall interest costs.
- Competitive interest rates: Personal loan interest rates are typically much lower than those for credit cards.
- No collateral: Most personal loans are unsecured, which means you don’t have to provide collateral like your home or car to back your loan.
- Predictable payments: Personal loans have a set payoff date, as well as generally fixed interest rates, making them easy to budget for.
Cons
- Potential fees: Personal loans can come with application fees, origination fees, prepayment penalties, and late fees, among others. It’s always worth asking about what types of fees lenders charge before applying for a loan.
- May not qualify: While unsecured personal loans don’t require collateral, this makes them harder to qualify for than secured loans. You’ll typically need a good credit score (a FICO score of 670 or higher) to qualify for the best rates.
- May hurt your credit: When you apply for a personal loan, the lender will run a hard credit check — this may lower your credit score by a few points for a few months to a year. And if you fail to make your payments on time, that can cause further harm to your credit score.
How to get a personal loan from a bank
The application process varies by lender, but generally, you’ll take the following steps to get a personal loan from a bank:
- Check your credit. Before applying for a personal loan, it’s a good idea to check your credit score. This will help you understand if you’re likely to qualify for a loan with the banks you’re considering.
- Determine how much you need to borrow. If you’re consolidating debt, you’ll need to figure out the total amount that you need to borrow to repay your debts. And if the bank you choose charges an origination fee, be sure to factor this in — that amount will be immediately deducted from your loan before it’s disbursed.
- Research banks and compare rates. It’s important to research different banks to compare rates, fees, and other terms. If possible, prequalify with a few banks online to see the terms you’re likely to be offered.
- Gather your documents. Before applying for a personal loan with a bank, you’ll need to gather some supporting documents, such as W-2s and tax returns, for proof of income.
- Apply. Once you select a bank and gather all the necessary documents, you can submit your application either online or in person. If approved, you’ll be given the opportunity to review and accept the loan terms before receiving funds. If denied, ask the bank for information on why your loan application was denied so you can improve your chances of approval in the future.
Is a bank loan right for you?
Before taking out a personal loan from a bank, it’s important to evaluate your financial situation and goals. A bank loan may be a good option if you need help spreading out the cost of a large purchase (like appliances for a new home) and you can easily afford the monthly payments. However, if you’re struggling with debt or have a poor credit score, a bank loan may not be the best choice.
If you’re looking for a convenient option, you may want to consider online lenders. These lenders offer a streamlined application process, with many loans approved within hours. Additionally, online lenders may offer more competitive interest rates than traditional banks since they don’t have to pay for brick-and-mortar branch locations. However, as with bank loans, it’s important to compare lenders before choosing one.