Choosing the right personal loan lender is important if you’re looking to borrow money — and for some, the right lender is a bank. Banks, credit unions, and online lenders all offer personal loans. But if you’re most comfortable transacting with an FDIC-insured institution that lends its own funds, we’ve compiled a list of the best banks offering personal loans.
The best bank for personal loans overall is SoFi because it offers competitive rates, a wide range of loan amounts to choose from, discounts, and no origination fees. Discover and LendingClub Bank are two other banks that stand out from other lenders. Learn the best banks offering personal loans.
Best personal loans from banks
Credible partners with three of the best banks offering personal loans:
Best overall
SoFi
4.9
Credible Rating
Pros and cons
More details
Best for no origination fees (and low rates)
Discover Personal Loans
4.4
Credible Rating
Est. APR
-
Loan Amount
$2,500 to $40,000
Min. Credit Score
660
Pros and cons
More details
Best online experience
LendingClub
4
Credible Rating
Est. APR
9.06 - 35.99%
Loan Amount
$1,000 to $40,000
Min. Credit Score
660
Pros and cons
More details
Why you can trust Credible
The Credible editorial team is independent and unbiased, which means that partners do not influence our editorial content. To help you find the best bank for personal loans for your situation, we analyzed over one thousand personal loan data points. Using data-driven methodologies, we scored criteria that are important to you. This approach allows us to objectively rank personal loans. To learn more, read our methodology below.
Other banks that offer personal loans
Methodology
Credible evaluated the best banks that offer personal loans based on factors such as customer experience, minimum and minimum fixed rates, minimum and maximum loan amounts, funding time, credit score and income requirements, loan terms, origination fees, discounts, nationwide availability, and whether cosigners are accepted. To assign star ratings, we used the following metrics and weightings:
- Rates and fees: 18%
- Loan terms: 18%
- Customer experience: 17%
- Eligibility: 14%
- Customer satisfaction: 10%
- Efficiency: 10%
- Options for poor credit and no credit: 9%
- Discounts: 4%
To select specifically for the best banks for personal loans, we chose only lenders that are FDIC-insured institutions and excluded both credit unions and non-bank online lenders from scoring. Credible’s team of experts gathered information from each lender’s website, customer service department, in-house resources, and via email support. Each data point was verified to make sure it was accurate at the time of publication.
Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.
How to compare personal loans
As you review personal loan options, here are criteria to consider:
- APR: A loan’s annual percentage rate (APR) reflects total borrowing costs. It accounts for both the interest rate and any upfront fees such as origination fees, and it’s a better measure for comparing loans than interest rates alone. Rates can range from single digits to 36% for personal loans. The lower the APR, the less your loan will cost.
- Loan amounts: Some lenders issue personal loans for up to $100,000 or more, but most offer loan amounts from $1,000 to $50,000.
- Repayment terms:Your loan’s repayment term dictates how long you have to pay off your debt. Generally, your repayment term will range from one to seven years.
- Fees: You may have to pay personal loan fees, such as an origination fee, upfront. While many banks charge origination fees, some do not. Also consider incidental fees like late payment fees and insufficient funds fees.
- Discounts: Some lenders offer rate discounts if you set up automatic payments or allow the lender to pay your creditors directly. These can help you save on interest on an ongoing basis.
- Cosigner option: Applying for a personal loan with a cosigner who has good credit can help you get approved for a loan if you have bad credit, and it can also improve your rate. If you think you need a cosigner, you may need to consider a non-bank online lender to get a loan.
- Time to fund: If you need your money quickly, go with a lender that disburses funds fast. Personal loan funding times are typically less than a week, but some lenders can fund your personal loan the same day you apply.
Tip
A personal loan calculator can help you see how much different interest rates and loan terms will cost you. Use this to try out different repayment terms and loan amounts until you find a monthly payment that works for your budget.
Eligibility requirements for personal loans
Eligibility requirements for personal loans vary from lender to lender. However, here are some general rules of thumb to keep in mind:
- Credit score:Some lenders cater to borrowers with low credit scores or limited credit histories. However, a good to exceptional FICO score (670 and above) gives you the best chance of securing a loan with a favorable APR. In general, banks tend to have stricter credit requirements than credit unions and online lenders.
- Debt-to-income ratio (DTI): Your DTI tells lenders how much of your pre-tax monthly income goes toward making your minimum debt payments. Generally, your DTI should be under 35%, though some banks may accept your application with a DTI as high as 40%.
- Income: Your lender may have a minimum income requirement. For example, you or your household must earn at least $25,000 per year to qualify for a personal loan from Credible partner Discover.
- Citizenship status: Banks often require you to be a United States citizen or permanent resident to qualify for funding.
- Age: You must be a legal adult to get a personal loan (age 18 in most states).
- Contact information: Your lender must have an address and other contact information on file. That way, it can communicate with you about your loan.
Good to know
To calculate your DTI, add up your minimum monthly debt payments and divide that by your gross monthly income. For example, if you owe $2,000 toward debt every month, and your monthly income before taxes is $6,000, your DTI is 33%.
How to apply for a personal loan
Follow these steps to apply for a personal loan:
- Compare lenders: Research personal loan lenders to find those that offer the loan amount and repayment term you need.
- Prequalify:Prequalify for a personal loan with several lenders to see the rates you might qualify for. Prequalifying doesn’t impact your credit score and is not an offer of credit. Note that once you formally apply, the lender will often conduct a hard credit pull, which could temporarily reduce your score by a few points.
- Pick a loan option: Compare loan options and select the best one for your needs and preferences. Pay attention to the APR and consider lender fees and customer satisfaction. Read consumer reviews on independent platforms like Trustpilot.
- Complete the application: Fill out the required forms online or in person. You’ll need to supply documentation that verifies your identity, income, and address and may be asked for supplemental documentation to prove your employment or identity. Formally applying for a loan can reduce your credit score by up to five points for up to a year.
- Review the loan agreement and get your funds: If your application is approved, you’ll need to review the loan agreement. If it’s in order, finalize the process with your lender and watch your linked bank account for the money.
Tip
After receiving funds, set up automatic payments to pay off your personal loan. You may get a discounted rate for doing so and prevent missing payments. Just keep the linked account sufficiently funded to avoid insufficient funds fees.
Pros and cons of personal loans
Pros
- Flexible: You can use personal loan funds to cover almost any expense.
- Lower APRs than some options: Your APR could be lower than the rate on other types of unsecured debt, like credit cards.
- Fixed interest rate: Personal loan interest rates are often fixed, giving you predictable payments for the duration of the debt.
- Unsecured debt: Many personal loans are unsecured, which means you don’t need to put up collateral to get money.
- Fast funding: You may be able to apply and receive funds on the same day.
Cons
- Qualification requirements: You typically need excellent credit to qualify for the best personal loan rates, and some lenders only consider applicants with at least good credit.
- Fixed loan amount: Unlike a line of credit, you receive funds as a lump sum and can’t adjust the amount you borrow or borrow again once you've repaid.
- Higher APRs than secured debt: The APR could be higher relative to the rate on a secured debt, like a home equity loan.
- More debt: You’ll owe more money and have another bill to fit into your budget.
How to get a bank loan with bad credit
According to the FICO credit-scoring model, scores range from 300 to 850, with lenders considering a higher score to indicate better financial health — and less risk for them. If you have a FICO score below 580, your credit is considered poor.
It can be harder to get a bad-credit loan, but there are a number of ways to improve your application and potentially your rate as well:
- Apply with a cosigner: If you have a friend or family member (with good credit) who is willing to share responsibility for your loan, find a lender that allows cosigners. A cosigner must make payments if you can’t , and your loan appears on their credit.
- Get a secured personal loan: Some lenders offer secured personal loans, which require pledging or putting up assets of value that the lender can seize if you default. These can be vehicles, homes, or items such as jewelry and collectibles.
- Seek a smaller loan amount: It’s possible that the amount you want to borrow is more than lenders think you can afford. Try asking for a smaller loan amount.
- Improve your credit: This one may take some time. A quick way to improve your credit is to ask for increases on your existing credit lines, like credit cards. If approved, your credit utilization could drop, which could immediately improve your score. You can also become an authorized user on someone else’s credit account.
“When you need a personal loan, I recommend checking with institutions you already work with. You might have an easier time qualifying with bad credit with a bank that knows you, especially if you’ve already taken out a loan with it and made your payments on time. You could also qualify for lower rates or better terms as an existing customer.” — Lauren Graves, Editor, Personal Loans
FAQ
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