Chase Bank Personal Loan Alternatives

JP Morgan Chase Bank doesn't offer personal loans, which may be disappointing if you're already a customer and want to keep your financial products with one institution.

While Chase offers a wide range of credit cards, personal loans are often a less expensive way to borrow. According to the Federal Reserve, the average two-year personal loan interest rate is less than 13%, while the average credit card interest rate is more than 21%.

If you're set on borrowing with a personal loan, you have plenty of Chase Bank loan alternatives to consider.

Why doesn't Chase offer personal loans?

Chase isn't the only big bank that doesn't offer personal loans — neither Capital One nor Bank of America offers personal loans currently. There are several reasons these banks don't offer personal loans — the bottom line is it doesn't make financial or administrative sense for the bank. Chase offers its customers other methods of borrowing, including home loans, auto loans, and credit cards.

5 Chase Bank personal loan alternatives

Fortunately, you have many personal loan lenders to choose from.

Online personal loan lenders

Online personal loans function the same way as traditional personal loans. The lender gives you a lump-sum loan that you pay back over time, usually with a fixed interest rate and fixed monthly payments. While adjustable-rate personal loans do exist, they're less common.

Because online lenders don't have the overhead of maintaining physical branches, you may be able to get a lower annual percentage rate, or APR. The interest rate you receive will be based on factors including your credit score, debt-to-income ratio (DTI), and income history.

Related: APR vs. Interest Rate on a Personal Loan

Traditional banks

Chase Bank doesn't offer personal loans, but many other traditional banks do. Getting a personal loan through the bank where you already do most of your banking may give you a loan payout faster and can make it easier to manage your loan payments. And if you already have a relationship with a certain bank, it could even net you a discount on your interest rate.

Learn More: Best Banks for Personal Loans

Credit unions

Credit unions are nonprofit institutions and frequently charge lower interest rates than big banks and online lenders. Many credit unions also serve specific employers and geographic areas and may offer more of a community-oriented experience. However, you'll need to either be an existing member of the credit union or become one to qualify for a personal loan.

Peer-to-peer lenders

Peer-to-peer (P2P) lenders offer loans directly from an individual or group of investors. Peer-to-peer lenders tend to have less strict lending requirements, allowing people with lower credit scores to qualify for loans. As with any lender, borrowers with bad credit can expect to pay higher interest rates than those with good credit scores and steady incomes.

Secured loan lenders and cosigned loans

Unlike home equity loans and auto loans, which are secured using your home's equity or your car as collateral, most personal loans are unsecured. Unsecured personal loans can be harder to get if you have bad credit since you aren't providing an asset to the lender to back the loan.

However, some lenders offer secured personal loans, which may be easier to qualify for. With a secured loan, you put down some form of collateral, and if you can't keep up with payments, you lose that collateral.

Alternatively, you may be able to add a cosigner or a co-borrower to your unsecured personal loan to improve your chances of approval. If you go this route, keep in mind that if you miss payments you'll be damaging your cosigner's credit as well as yours.

Related Articles:

• What Is a Collateral Loan?
• Secured vs. Unsecured Personal Loans
• Best Personal Loans With a Cosigner

How to choose the right lender

The right personal loan lender for you depends on your financial situation, loan needs, and preferences. Weigh the following factors carefully:

• Approval requirements: Different lenders require different credit score minimums, debt-to-income ratios, income, and more. If you don't have good credit, look for lenders that have a low credit score minimum.
• Interest rate: Prequalify to compare potential APRs from multiple lenders. The higher the rate, the more you'll pay.
• Fees: In addition to interest, there may be fees to look out for, such as origination fees or late payment fees. Consider these added costs when comparing lenders. And note that origination fees are charged upfront and reduce the loan amount you receive.
• Loan amount: Personal loans often range from a few thousand dollars to around $50,000, though this varies by lender. If you need to borrow a larger amount, there are some lenders, like Wells Fargo and Sofi, that fund up to $100,000 or more.
• Customer satisfaction and service: A personal loan is a major financial commitment, so you should work with a lender you trust. Read customer reviews to get a sense of different lenders' reputations and customer service.
• Funding time: Some lenders may take up to a week to fund your loan, while others can do so the same day you apply. If you need loan funds fast, look for lenders that offer fast or same-day funding.
• Ability to cosign or co-borrow: If you have bad credit, a low income, or a high DTI, you may want to apply for a personal loan with a cosigner or with a co-borrower. Either may help you qualify for a better rate. Not all lenders allow cosigners, so narrow your search to lenders that do. Many allow you to apply with a co-borrower or joint applicant.

Alternatives to personal loans

Sometimes, taking out a personal loan may not be the best way to borrow. Luckily, you have several alternatives that may be more cost-effective or offer faster funding, different loan amounts, or more convenience. Below are some common personal loan alternatives:

• Credit cards: Credit cards provide a revolving line of credit you can borrow against and repay each month. If you carry a balance, you'll be charged interest — likely at a higher rate than with a personal loan. If you can pay off your balance within the card's grace period (typically one billing cycle), you could borrow interest-free.
• Home equity financing: If you own a home, you may be able to borrow against your home equity with a home equity loan or home equity line of credit (HELOC). These options often have lower interest rates compared to personal loans, but they come with additional risk. If you default on the loan, you can lose your house. Since your home needs to be appraised, they also take much longer to approve and fund.
• Payday alternative loans (PALs): Offered by federal credit unions, PALs allow credit union members to borrow up to $2,000 with repayment terms ranging from 1 to 12 months. These loans are much more affordable than traditional payday loans — APRs are capped at 28%. You can't take out more than 3 loans over a 6-month period.
• “Buy now, pay later” (BNPL) loans: BNPL loans are short-term installment loans you can use to split up purchases into multiple payments. Some BNPL loans don't charge interest but come with late fees for missed payments. Others are similar to traditional personal loans with APRs up to 36%. These loans are often available online, but you can use them in stores, too.
• Cash advance apps: These apps let you borrow against your next paycheck. They don't charge interest, but most request tips and charge fees to send funds instantly. Some also charge subscription fees.

How to apply for a personal loan

Applying for a personal loan is easy with a few simple steps:

1. Get prequalified: Use a prequalification tool, like Credible's above, to get loan estimates from multiple lenders. Don't worry, prequalification won't affect your credit score. Just know that to get a firm offer, you'll need to formally apply, which could impact your score.
2. Compare quotes: Once you've prequalified, compare potential rates and terms. Then, choose a lender based on customer reviews, and which company has the lowest interest rate, fees, and loan term that works best for you.
3. Decide how much you need to borrow: Consider your debt-to-income ratio and how much you can afford to borrow.
4. Apply: You'll need to provide basic information, such as your Social Security number, monthly income, and monthly rent or housing payment.
5. Provide any documents your lender needs: Requirements vary by lender, but you may need to provide documentation to prove your employment and income, like tax returns, bank statements, pay stubs, or proof of address. You'll also need to provide proof of your identity, such as a driver's license or passport.
6. Sign for the loan and receive funds: If you're approved for a loan, you'll sign a loan agreement. Then the lender will send your loan funds, typically by direct deposit to your bank account. You can typically manage your payments directly on the lender's website.